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Sasol, South Africa’s biggest company by revenue, said it held meetings with shareholders as dissatisfaction grew over cost overruns at the $13bn (nearly R200bn) Lake Charles chemical project in the US.
The meetings began after Sasol raised the estimated cost of the project by $1bn (over R15bn at current rates) in May, having increased it only three months earlier, the company said in a response to questions. On August 16, Sasol delayed its annual results, saying it hasn’t completed a review of the problems at the project. That prompted its shares to fall the most in 20 years on an intraday basis in Johannesburg.
“The chairman of the Sasol board of directors together with management has held meetings with a number of shareholders to hear their views, concerns and expectations,” the company said on Monday. “It would not be appropriate for Sasol to comment on behalf of our shareholders on their expectations.”
The meetings took place shortly after May 22 and no “additional, non-disclosed information” was provided, a spokesman added. No closed analyst calls have taken place, he said.
Problems at Lake Charles, in Louisiana, have hampered Sasol’s plans to expand internationally and to increase chemicals manufacturing alongside its core fuel-production business. The company’s market value has almost halved to R168bn over the past 12 months, making it the third-worst performer on an index of Johannesburg’s 40 biggest stocks.
Representatives of Allan Gray, which owns 3.4% of Sasol’s stock according to data compiled by Bloomberg, have met with Sasol’s board about the Lake Charles project, said Andrew Lapping, the chief investment officer of the Cape Town-based fund manager. He declined to comment on the talks.
Coronation Asset Management, South Africa’s second-biggest money manager by assets under management, and which also owns Sasol stock, declined to comment.