Sasol is planning its first sale of dollar bonds to lower the cost of gas-to-liquid (GTL) plants it is considering building in the US and Canada
The company was planning to raise debt to as much as 40 percent of equity within three to five years, from 2.7 percent at the end of June, Sasol spokesman Alex Anderson said yesterday.
Yields on the safest US and European debt have dropped on speculation that borrowing costs will stay at record lows as the global economic outlook worsens, giving local firms the chance to raise money at cheaper rates than at home.
The rate on South African company dollar debt has fallen 160 basis points this year to 4.48 percent, according to JPMorgan Chase’s corporate emerging markets bond index. “It makes perfect sense,” said Avior Research analyst David Lerche.
Sasol operates in 38 countries and uses proprietary Fischer-Tropsch technology to make petrol, diesel and jet fuel from coal and gas. Sasol, which invested R29.2 billion in capital projects during the year, had not determined how much money it would raise or when the process would begin, said chief financial officer Christine Ramon. Sasol dropped 1.61 percent to close at R377.50 on the JSE yesterday.