Sasol takes a dive

When the beacon of South African ingenuity, which helped the country thrive during sanctions, goes bankrupt, there is not much hope for the economy.

From a Fin24 article with the headline "Sasol loses another 40% of its value in an hour - it's now down 95% from last year", compiled by Helena Wasserman:

Sasol's share price lost 40% of its value in opening trade on Thursday morning.

The share price briefly dipped below R30 - from R470 less than a year ago. Its share price has now lost almost 95% of its value since April last year. 

Sasol - until recently one of South Africa's ten biggest companies, and traditionally one of the biggest local corporate taxpayers - is now valued by the market at less than R20 billion. 

It has a debt burden of more than R120 billion. Investors are concerned that Sasol may contravene its loan agreements with banks following the oil crash.

Some of Sasol's loan conditions (so-called debt covenants) require that its debt-to-profit levels remain above a certain level. Sasol's profits will take a hit from the lower oil price, which will probably leave it in breach of these debt covenants. This means that its loans could become payable immediately.

There is still hope but only if we take back management of our own country and allow ingenuity to thrive again. Help us to get the 2 million mandates for the ULA to www.ulacongress.com.