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Embattled chemicals group Sasol, whose share has lost almost 90 percent of its value so far in 2020, was cut deeper into junk status by Moody’s Investors Service yesterday and is under review for a further downgrade.
Moody’s yesterday cut Sasol to Ba2, the second rung of non-investment grade, having cut it to junk status earlier in March.
“Sasol has been caught at the intersection of a series of credit negative developments, including a significant deterioration in the operating environment from a combination of the collapse in oil prices, widening impact of the coronavirus outbreak and weakening of SA’s sovereign credit quality,” Moody’s said.
This came at a time when its balance sheet has reached peak gearing because of Sasol’s Lake Charles Chemicals Project related capital spending, the agency said.
The project in Louisiana in the US has run 45 percent over budget and seen the company struggle to keep up with payments on its R121 billion debt. — BusinessLive.
Peter Tanyanyiwa
Online Reporter