Sasol lets go of Mozambique plant

Sasol says the deal to sell its Mozambique plant is part of its ongoing, strategy aligned, asset divestment programme.

Sasol has disposed of its 49% stake in the Central Termica de Ressano Garcia gas-to-power plant in Mozambique as it continues to divest of businesses that don’t fit its new strategy and in order to reduce debt. It sold the plant, which is based at Ressano Garcia in Maputo Province, to Azura Power for $145 million (R2.14 billion). The other 51% stake is owned by Mozambican state-owned electric company Electricidade de Mocambique (EDM).

The group is refocusing its operations around its core chemicals and energy businesses in a move it says will enhance cash generation, create more value for shareholders and ensure the sustainability of its business. Under ‘Sasol 2.0’ the chemicals business will focus on its activities in specialty chemicals where it has differentiated capabilities and strong market positions. The energy business will comprise its Southern African value chain and associated assets.

Last month, Sasol sold its 50% stake in the Gemini high-density polyethylene joint venture in the US to its partner INEOS for $404 million (R6.2 billion). That followed the sale of a 50% interest in its base chemicals business at Lake Charles in the US to LyondellBasell Industries for $2 billion.

This transaction is part of the Company’s ongoing, strategy aligned, asset divestment programme,” the company said. “Sasol remains fully committed to upstream operations in Mozambique, which continue to be integral to Sasol’s strategy.”
The sale is subject to conditions, including regulatory approval and the waiver of pre-emption rights held by EDM.

Sasol’s shares fell 5% to R131.13 yesterday. The price of Brent crude oil dropped by close to 4%.

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