Fri, 10 Jul 2020

South Africa's state-owned Central Energy Fund is considering buying assets that have been put on the block by fuel and chemical maker Sasol as it seeks to restore itself to profitability.

The CEF "needs to put an end to the losses" at its units, including oil company PetroSA, Chairman Monde Mnyande told lawmakers on May 12, adding that Sasol assets were on the table.

In a statement on Tuesday, however, the CEF dismissed reports that the CEF was in talks with Sasol to buy its petrol stations as "malicious" and bordering on "sensational", adding that it was merely considering these as a possible option.

"At a recent portfolio committee meeting for Mineral Resources and Energy, the Chairperson of CEF, Dr Monde Mnyande, informed the committee that the Group would be embarking on a campaign to drive both domestic and foreign direct investments in the energy value chain geared to reignite the South African economy and create much-needed job opportunities.

"Part of this campaign will be to take advantage of all available energy assets that are up for sale in the marketplace and are in need of strategic partnerships."

According to the statement, Mnyande cited Sasol's available assets, which are "public knowledge", as "an example" that the group would consider "in line with its investment strategy".

It remains unclear how the CEF will fund any deals - its balance sheet is already stretched, and the government has said it can't afford to provide additional funding to state companies.

PetroSA has been the biggest drain on the CEF. It last made a profit in 2013, and lost R14.6 billion in the year through March 2015 - a record for any state company at the time - mainly because of an impairment on its offshore Ikhwezi natural-gas project.

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