Sasol jumps after locking in fuel prices
JOHANNESBURG – Sasol Ltd. has started a hedging program as it looks to tackle plummeting prices and a crash in demand for its oil products and chemicals. The shares surged as much as 13%.
It hedged about 80% of its synthetic fuel production in the fourth quarter at near $32 a barrel, the South African oil and chemicals producer said Tuesday. It will continue to hedge crude for the next 12 months.
The move follows credit rating downgrades by Moody’s Investors Service and S&P Global Ratings. The cost of some of Sasol’s floating-rate debt is partly linked “to our credit rating and the revised rating profile will therefore result in an increase in finance costs from existing facilities” by approximately $10 million a year, it said.
Source: iol.co.za