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Sasol to Implement Additional Cash Conservation Measures amid Continued Market Volatility in South Africa

Sasol announced that it was implementing additional cash conservation measures to provide a further buffer against short term volatility due to the continued negative impact of COVID-19 on market demand.

Earlier this month, Sasol announced that as part of a comprehensive response plan it had set a cash conservation target of US$2 billion by June 2021, focusing on management self-help measures aimed at increasing business efficiencies.

”While we are making good progress on our target, the low oil price and impacts of COVID-19, and in particular the national lockdown in South Africa, has led to a steep decline in fuels demand,” said Sasol President and Chief Executive Officer Fleetwood Grobler.  ”Given our assessment of the market and current developments, we are implementing further measures to increase cash conservation during this period.”

In addition to material cut backs in capital, significant reductions in external spend, and ongoing work targeting a significant reduction in working capital, Sasol will implement a number of actions aimed at reducing employee-related expenses.

A fee reduction of between 20% – 40% will be implemented for the Sasol Limited Board of Directors, across all fees. The Group Executive Committee will also implement a salary sacrifice of 20% up to December 2020.

As CEO, Mr. Grobler’s salary sacrifice comprises two-parts. For three months, 33% of his salary will be donated to the Solidarity Fund set up by the South African government to support the fight against COVID-19. For the remaining five months, a salary sacrifice of 20% will apply as part of the company’s cash conservation drive.

The company says that given the current environment, it must take all necessary measures to proactively manage market volatility and uncertainty. The decision to implement a salary sacrifice is regrettable, but this is a short term measure necessary to help secure Sasol’s long-term future.

 

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