Sasol Ltd. is reining in oil expansion and considering job cuts as part of ongoing efforts to turn the business around and protect itself from market downturns, Bloomberg News reported. The overhaul at the South African company follows a 50% slump in its shares this year as oil’s crash strained finances already pummeled by cost overruns at a giant U.S. chemicals project. Now it’ll focus squarely on its core chemicals and synthetic-fuels divisions as it seeks to boost cash and bring down debt.
South Africa
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South Africa’s state-owned agricultural lender Land Bank is close to finalising a liquidity and debt restructuring plan after it missed loan repayments this year and had its credit rating cut, it said on Wednesday, Reuters reported. A statement from the company said that the plan under discussion with lenders and the National Treasury is intended to raise a 3 billion rand ($174 million) liquidity facility from lenders and extend terms of all debt maturing in the next 12 months.
The South African government would need to find at least 10 billion rand ($580 million) in new bailout funds if it wants to rescue South African Airways (SAA) with most of its routes intact, a long-delayed rescue plan showed, Reuters reported. State-owned SAA’s longstanding frailties have been exacerbated by the COVID-19 pandemic, which has pushed even previously profitable airlines into financial distress. SAA suspended commercial passenger flights in March, when the government imposed one of Africa’s strictest coronavirus lockdowns.
South Africa made it clear it wasn’t seeking any type of debt suspension to fight the coronavirus pandemic, with such measures likely hurting more than they would help due to the high domestic ownership of securities, BloombergQuint reported. “There are a few countries, such as Egypt and South Africa, that aren’t among those” seeking to be involved in debt standstill talks being coordinated by the Institute of International Finance, special envoy Trevor Manuel said in response to emailed questions.
Ratings agency Moody’s has downgraded South Africa’s Land Bank deeper into subinvestment grade after the state company missed another debt interest payment due to liquidity challenges, Reuters reported. The Land and Agricultural Development Bank of South Africa (Land Bank), the country’s largest agricultural-focussed lender, defaulted on the loans totalling 50 billion rand ($3.01 billion in April. And in a notice on the Johannesburg Stock Exchange on June 1 Land Banki said it was not in a position to meet interest payments of nearly 120 million rand.
South African state airline SA Express escaped liquidation on Tuesday after a judge granted a three-month delay in liquidation proceedings, giving the government more time to clarify its plans for the domestic and regional carrier, Reuters reported. SA Express, a different business to national flag carrier South African Airways (SAA), was placed under provisional liquidation in April after its administrators said they could not secure funding for turnaround efforts.
Creditors of South African Airways (SAA) on Monday approved another delay in the publication of a rescue plan after the cash-strapped airline’s administrators requested an extension because of an objection by trade unions, Reuters reported. The rescue plan for SAA, which has not made a profit since 2011, was due to be published on Monday. It has been repeatedly pushed back amid fierce wrangling over the airline’s future.
South Africa’s Comair , which is under bankruptcy protection, intends to halve its fleet of aircraft as part of efforts to rescue the company, its administrators said on Friday, Reuters reported. Comair, which operates the local British Airways franchise and budget airline kulula.com, filed for business rescue, a South African form of bankruptcy protection, last month after restrictions aimed at curbing the spread of the coronavirus forced airlines to stop flying.
South African farmers are increasingly turning to commercial lenders to top up their working capital as the Land and Agricultural Development Bank battles a liquidity crisis, Bloomberg News reported. The Land Bank, which supplies about 30% of loans in the agricultural industry, missed a loan repayment in April that triggered a cross-default provision in some of its bonds. As the state-owned lender works with its funders and National Treasury to restore its financial affairs, farmers are looking elsewhere.
South Africa’s Comair said on Tuesday it was unlikely to restart operations before November, even after the easing of restrictions on air travel, as the airline requires a substantial cash injection, Reuters reported. The company, which operates the local British Airways franchise and budget airline kulula.com, entered bankruptcy protection process last month after a nationwide coronavirus lockdown forced airlines to suspend all commercial flights.