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(Bloomberg) -- Sasol Ltd. is looking to revive its international chemical business, including a sprawling US complex, to boost earnings and open up an option to potentially list it, according to the company’s chief executive officer.
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The company’s shares jumped as much as 12% in Johannesburg, the most since March 2021. The South African maker of fuel and chemicals from coal reported its first loss since 2020 last year and took billions of dollars in writedowns. The company has about $4 billion of debt and suspended dividend payouts. Its shares tumbled 55% in 2024.
Sasol CEO Simon Baloyi, a two-decade veteran of the company who took over the role in April, sees the $12.8 billion Lake Charles chemicals facility in Louisiana playing a significant role in generating cash and raising investor confidence.
“It’s a fantastic asset that Sasol has and we have to make sure it starts making money,” he said in an interview at Bloomberg’s office in Johannesburg. The company separated the international chemical business from operations in South Africa and has set targets to increase its contribution to earnings and strengthen it as a standalone entity. While chemicals make up about a third of earnings, the regional contribution of the US is just 6%.
“In the future, at the peak of the chemical market, it’s going to give us lots and lots of strategic options to create shareholder value, where you can have an option to either list it by itself or you can merge it with someone else,” said Baloyi, 48.
Success could mean revising a dark chapter in the company’s history. The Lake Charles chemicals project was originally designed to expand Sasol’s operational footprint abroad, but suffered from mismanagement issues, hurricanes and billions of dollars in cost overruns that ballooned the company’s debt.
In 2020, the year it reached completion, Sasol sold a $2 billion stake in the US based-chemicals business to form a joint venture with LyondellBasell Industries NV to cut debt. It also accelerated an asset-sale program that wrapped up the following year.
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The company’s shares have plunged for two straight years and its weighting on the FTSE/JSE Africa All Shares Index has dropped to 0.9% from 3.2% a decade ago.