Sasol has been struggling over the last 5 years as it has battled with cost-overruns at its Lake Charles project in the US while accumulating a significant amount of debt – moves which have seen Moody’s Investor Services to downgrade Sasol debt to “Junk” status.
With Russia and Saudi Arabia battling it out in the oil markets and driving the cost of the key commodity down by almost 30%, Sasol has been aggressively sold down.
This has meant that Sasol needs to bolster its balance sheet and will be seeking to raise R99bn by the end of the 2021 financial year. At least R33bn is expected to be through the issue of new shares as part of a rights issue.
What is the impact of this on your OUTvest portfolios? Below is a breakdown across our various funds and their total level of exposure to SASOL:
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OUTvest Cautious– 0.15% |
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OUTvest Stable – 0.21% |
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OUTvest Moderate – 0.36% |
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OUTvest Aggressive – 0.41% |
Source: CoreShares
In short, Sasol has not been a major drag on any of the OUTvest portfolios. Our approach, as always has been to ensure that all our portfolios are well diversified so that no individual stock can have a material impact on the performance of our funds.