Sasol Ltd has retreated from a potential $2 billion share sale and announced that its first-half profit has more than tripled, marking the highest jump in its shares in a year.
In an announcement Monday, the South African chemicals and fuel maker says it has enough cash in hand from asset disposals and cost savings to reduce debt and avoid a rights offer related, in part, to its Lake Charles Chemical Complex.
Speculation over a share sale began about a year ago amid fallout from the Lake Charles project, declining oil prices, and Moody’s Investors Service’s decision to cut the company’s credit rating to junk.
The company has been reducing debt through an accelerated sale of assets—most notably by offloading a 50% stake in its base-chemicals business at Lake Charles to LyondellBasell Industries NV for $2 billion.
To date, the company’s divestments total $3.3 billion.
“A decision was made not to pursue a rights issue given the current macroeconomic outlook, and the significant progress made on our response plan initiatives,” Sasol said in the statement. “The balance sheet deleveraging pathway will continue to be prioritized to ensure that we operate within our financial covenants.”