Sasol says fuel stations not up for sale

Central Energy Fund denounces reports of it wanting to buy Sasol’s stations.

JSE-listed petrochemicals giant Sasol has no plans to sell its 410-strong chain of retail fuel stations in South Africa and is not in talks on such a deal with the state-owned Central Energy Fund (CEF).

This was confirmed by both Sasol and CEF on Tuesday, following media reports that they were in talks about the possible sale. It comes as Sasol is looking to sell some assets in the face of the Covid-19 financial fallout, which has seen global oil prices plummet.

Read: Sasol slumps as lower oil prices, virus crimp full-year profit

“Sasol is not divesting its downstream fuel retail business as part of its ongoing asset disposal process,” the group said in a statement.

“While Sasol is in the process of reviewing opportunities in this regard, it is important to note that we remain committed to our strategy, which includes growing our fuel retail presence in South Africa,” Sasol CFO Paul Victor noted.

Sasol CFO Paul Victor. Image: Moneyweb

“Although we are regularly approached by interested parties to acquire or partner with us in the retail network space, we are not in discussions with any such parties to divest or partner in our downstream fuel retail business. While recent events have created significant short-term challenges, we are confident our business is fundamentally robust and we have a clear pathway to resume value creation,” Victor added.

The CEF meanwhile issued a harsher statement, describing reports on it being in talks with Sasol about buying its fuel retail business as “malicious” and “bordering on sensational”.

“At the recent portfolio committee meeting for Mineral Resources and Energy, the chairperson of CEF, Dr Monde Mnyande, informed the committee that the group would be embarking on a campaign to drive both domestic and foreign direct investments in the energy value chain, geared to reignite the South African economy and create much-needed job opportunities,” it noted.

“Part of this campaign will be to take advantage of all available energy assets that are up for sale in the marketplace and are in need of strategic partnerships….” He further cited Sasol’s available assets, which are by now a public knowledge, and are up for sale as an example, which CEF group would consider in line with its investment strategy.

“At no stage, did the CEF Board nor its chairperson Dr Mnyande publicly announce that it is negotiating with Sasol to buy its petrol stations,” the CEF said.

According to Sasol, its energy business in South Africa has a strong brand of 410 retail convenience centres, which account for 11% of the regulated retail market.

“Here, our focus remains on improving margins by looking for higher value markets for our existing production of fuels. This means both organic retail growth, by increasing our retail site development and conversion of sites to the Sasol brand, and possible small-scale acquisitions,” said Victor.

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Sasol also reiterated in its statement the group’s announcement on March 12, regarding actions aimed at addressing “the challenges created by the impact of Covid-19” and the decline in oil and chemical prices.

“A package of measures has been developed that is intended to reposition the company over the following 24 months. One of these measures will be our existing asset disposal programme. Any divestment or similar activity will be executed in line with balance sheet, shareholder value and strategic objectives in mind and builds on the comprehensive asset review process which commenced in November 2017,” the group said.