Sasol taps inflated demand for bonds
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Industrial Reporter
SASOL, the world's biggest maker of liquid fuel from coal, says it is planning to sell randdenominated bonds, tapping demand for debt that has been inflated by a government payment to investors due at the end of the month.
News of Sasol's bonds broke after the group put out a profit warning in the past week, announcing it expected attributable earnings for the year to June to be down 26% compared with the corresponding period a last year.
An analyst said at the time that the group was still committed to financing projects and maintenance worth about R50bn over the next few years despite the expected drop in earnings.
The analyst said Sasol might have to raise its gearing level to finance these projects.
Sasol said the expected drop was down on the 22% drop forecast in the first profit warning in June. At R7,50 to the dollar, the rand was significantly stronger than the expected rate of R8,28 to the dollar that was used for the first profit warning.
Sasol spokesman Johan van Rheede said: "Sasol is working on issuing a bond in the market in the near future." He declined to give further details on the size or the timing of the offering.
Sasol and AngloGold, the world's second-biggest gold producer, are among companies selling rand bonds to tap demand for debt. Investors are seeking fixed-income securities for the R13bn in coupon payments government will make to holders of its bonds this month.
AngloGold said that it planned to sell bonds to help finance a R1,2bn expansion at its TauTona mine south of Johannesburg.
Sasol sold 900-million three-year bonds in June 2000. The bonds were priced to yield 1,15 percentage points more than the South African government bond maturing in October 2002 the closest comparable benchmark.
Sasol closed 1,27% to R80 after 852074 shares traded in 1233 deals yesterday.
Aug 13 2003 08:35:23:000AM Larry Claasen Business Day 1st Edition
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