## sasol fi nancing 

## Securing competitive funding 

Sasol Financing is responsible for the group’s central treasury, ensuring that Sasol can meet its funding requirements and expansion objectives in time and as cost-effectively as possible, while keeping financial risks to a minimum. We had another busy and successful year in 2010. 

Due to the cash-conservation approach adopted by management in the volatile economic climate, Sasol maintained solid cash balances on a strong, deleveraged balance sheet. The group continued to generate considerable cash flows in the year, ensuring that it remained in a favourable position to fund its growth programme and meet all debt service requirements. It also allowed for the adoption of a progressive dividend policy. 

In June 2010, Sasol Financing secured a US$300 million multi-currency revolving credit facility from China Construction Bank at competitive terms. This facility is for global general corporate purposes and has a tenor of three years, with two extension options of a year each. The facility replaces the € 400 million, fi ve-year syndicated revolving credit facility which expired in May 2010. Sasol Financing also maintains suffi cient short-term credit lines with a number of relationship banks for general treasury purposes. 

## Facilitating new projects 

Sasol Financing is a specialist business partner to group and joint-venture companies, providing assistance and guidance to best meet their funding 

requirements for new growth opportunities. We work to secure the most appropriate financing structure in terms of cost, size and risk sharing. 

In the final quarter of 2010, BNP Paribas was appointed as the project fi nancial adviser to assist with the funding of Sasol Synfuels International’s Uzbekistan joint-venture GTL opportunity. This is an important mandate. Sasol, along with its partners, Uzbekneftegaz and Petronas, aim to secure approximately 70% project debt. Project financing is new to Uzbekistan, a landlocked country where the primary funding risks relate to logistics and the political environment. To mitigate these risks, correct lender selection is imperative. We believe export credit agencies and development finance institutions will play an important role in securing the most competitive and appropriate fi nancing for this opportunity. 

In December 2009, Sasol Financing assisted Sasol Oil and Total, the shareholders of the Sasolburg crude oil refinery, Natref, in concluding a ten-year financing facility. The R735 million facility has been provided by Nedbank. It will be used to upgrade the dispatch area, carry out phases one and two of the hydro- fluoride-alky unit risk mitigation project, as well as to increase the capacity of the diesel unifiner unit. Most of these projects, which meet the group’s strategic goal of nurturing its existing assets, will be completed during 2011. 

## Repaying our Eurobond 

At the end of the 2010 fi nancial year, Sasol Financing’s fi ve-year, € 300 million 

Eurobond matured and was repaid. With a coupon rate of 3,375% per annum, the bond provided an attractive funding rate throughout its lifetime. It also raised Sasol’s credit profile in the international capital market. 

## Managing risks 

Sasol Financing, the group executive committee and the Sasol board of directors review the use of oil price hedges as a part of risk management. Although Sasol Financing has assisted in the past five years in arranging a hedge on 30% of Sasol Synfuels’ production, Sasol did not enter into a strategic oil hedge in 2010. Given that our balance sheet was strong and effective cost-cutting measures had been implemented early in the global economic crisis, hedging at the levels available in the market were not considered to be appropriate. We will continue to review hedging opportunities in the year ahead. 

## Confirming our credit ratings 

Sasol’s corporate global credit ratings have been reviewed and confirmed by Moody’s and by Standard and Poor’s at Baa1/ stable/P-2 and BBB+/Negative/A-2, respectively. Our ratings have been retained at investment grade throughout the global economic crisis. 

## Continuous improvement 

In 2010, in line with the group’s shared value of continuous improvement, Sasol Financing upgraded its SAP treasury risk management system to allow for improved efficiencies and controls. 

