South African executive Simon Baloyi-led Sasol wins $241 million Transnet payout

Key Points

• Sasol wins $241 million Transnet payout after court ruling over pipeline tariffs, boosting investor sentiment and clearing legal uncertainties. 
• Simon Baloyi leads Sasol recovery with long-term growth plans, eyeing a Lake Charles Chemicals IPO to unlock global shareholder value. 
• Transnet financial woes deepen as Moody’s warns of credit risks despite $2.8 billion state guarantee; appeal delays Sasol payout.

Sasol, the Gauteng-headquartered energy and chemicals giants led by South African executive Simon Baloyi, has secured a R4.3 billion ($241 million) settlement from Transnet SOC Ltd. The payment, which excludes VAT, resolves all pending litigation between the two state-backed firms, according to a Sens announcement issued after the market closed on Friday. 

The payout stems from a June 2024 High Court ruling in favor of Sasol and France’s TotalEnergies SE, ordering Transnet to pay R3.9 billion ($218.3 million) plus accrued interest. The court action related to long-standing disputes over pipeline tariffs and infrastructure costs. The full amount is expected to be settled by June 30, 2025.

Sasol stock rally poised to continue as legal cloud lifts

While Sasol’s shares dipped 2 percent on Friday, the stock ended the week up nearly 20 percent following an upbeat Capital Markets Day and strategy update. Analysts expect further gains when the JSE opens on Monday, buoyed by positive investor sentiment over the legal victory and Sasol’s renewed long-term vision. 

However, enforcement of the settlement is currently on hold, pending the outcome of Transnet’s appeal to the Supreme Court of Appeal. The utility, which operates South Africa’s ports, rail, and pipeline infrastructure, has also filed a separate R855 million ($47.8 million) counterclaim against Sasol, with judgment still outstanding.

Transnet under strain as Moody’s flags fiscal fragility

Transnet’s payout comes days after Finance Minister Enoch Godongwana announced a fresh R51 billion ($2.8 billion) government guarantee to shore up the cash-strapped SOE. Moody’s Investors Service has flagged the operator’s deteriorating financial health, warning of potential credit downgrades absent swift restructuring. 

For Sasol, the legal clarity arrives at a critical time. The company posted R122.1 billion ($6.76 billion) in revenue for the second half of 2024, down 10.4 percent year-on-year due to declining crude oil prices, weaker refining margins, and lower sales volumes.

Baloyi charts Sasol’s next chapter with chemicals IPO on horizon

Sasol, with operations in 33 countries and a workforce of over 30,000, remains pivotal to South Africa’s energy security through its synthetic fuel technology and petrochemical production. 

Appointed in April 2024, Baloyi has been steering Sasol through macroeconomic volatility and domestic unrest. His long-term vision includes a potential international IPO of the company’s Lake Charles Chemicals unit by 2030, signaling renewed focus on unlocking shareholder value and expanding Sasol’s global footprint.