JOHANNESBURG – Petrochemical giant Sasol had its biggest one-day drop on the JSE in more than 20 years after it once again revised the cost of its ambitious Lake Charles Chemicals Project (LCCP) by a further $1 billion (R14.4bn).
The news saw the group’s stock drop by 12.99 percent to close at R375, the biggest plunge since October 1, 1998.
In February Sasol had said it expected the project to cost between $11.6bn to $11.8bn, but yesterday revised the figure to $12.9bn.
The mega project had an initial price tag of $8.9bn at the time the final investment decision was made in 2014, taking the total cost overruns over the years to $4bn. Sasol said the increase in the LCCP’s cost did not alter the group’s capital allocation strategy.
“This increase in the anticipated LCCP capital costs is extremely disappointing. Executive management has implemented several changes since February 2019 to further strengthen the oversight, leadership for the project and frequency of reporting,” Sasol said.