THE market may force Sasol into a pronouncement regarding its immediate sooner than the South African petrochemical company planned following the first few hours of trade in Johannesburg in which the share was hammered.
Sasol shares were down a further 33% currently valuing the company at R24.5bn – some 92% less than a year ago. Declines in the share have totalled 88% since the beginning of the year.
There are strong rumours that Sasol will be forced into a rights issue in order to stay afloat after major overruns on the development of its Lake Charles Chemical Project (LCCP) last year, followed by the double whammy of a oil price war and the COVID-19 pandemic in the last 30 days.
The company had arranged for a conference call to provide details of its financing plans on March 10 but then postponed the meeting until March 17 citing market complexities. It said it wanted to absorb the impact of recent market activity.
There has been “historic tumult” on world markets, according to the Financial Times which said US president Donald Trump’s ban on Europe to US travel and the upgrade of COVID-19 to pandemic status by the World Health Organisation (WHO) had led to a “cratering” of stocks worldwide.
Chris Rupkey, chief financial economist for MUFG Union Bank, was quoted as saying: “Stock markets around the world are in free-fall as the spread of this deadly pandemic virus has the potential to slow the global economy to a crawl”.
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