South Africa’s Sasol Ltd. plans to cut jobs and end West African oil operations as part of a business revamp, the petrochemicals producer said on Thursday, adding it had also agreed a deal with lenders to relax borrowing rules.
Sasol has been reviewing its business as it struggles with high debt levels, falling oil and chemical prices and lower global demand due to the Covid-19 pandemic.
The company, the world’s top producer of motor fuel from coal, said the review had identified chemicals and energy as the focus areas for its future business.
“The revision of our strategy aims to have a greater focus on enhanced cash generation, value realisation for shareholders and business sustainability,” it said in a statement.
Sasol said the revamp would affect its workforce, but did not say how many jobs might be lost. The company said it was seeking consultations with trade unions in South Africa and aimed to do the same in other countries.
It also said it had concluded discussions with lenders, adding they had agreed to waive a debt test due this month and relax one due in December 2020. That test will allow the firm to have net debt of four times earnings before interest, tax, depreciation and amortisation, up from three times previously.
The company added its liquidity headroom would remain well above $1 billion.
