“The PetroSA Board has not passed nor does it intend to pass any resolution to place the company under business rescue, as the company's financial year-end (March 31, 2017) reflects an adequate cash balance. Current assets and cash flow projections show that the company will have adequate cash resources for the business to carry on with its normal trading activities and meet its financial obligations for the foreseeable future. The present position of the company is that it is not in financial distress,” Mabaso said.
Mabaso also stressed that PetroSA has provided for an abandonment liability, but added that this liability is not immediately due.
He added that the scheduled shut down will commence as planned towards the end of the year.
PetroSA’s statement follows a report in Business Day (4 May) indicating that the parastatal was seeking business rescue as it faces a R2.2bn loss in year to March.
“In response to this challenge, we have embarked on a detailed turnaround plan, which includes the partial modification of the refinery to produce fuels from light crude (condensate). PetroSA is already producing almost half of its planned production capacity from light crude. There has not been any breakdown of the refinery as a result of the processing of condensate, after the modification.”
Other turnaround initiatives are at embryonic stages and some will take longer, since they will require support from the shareholder and approvals at other levels. These, by their very nature, have long lead times before they reach maturity.
On the recent media allegations, PetroSA states the following:
1. The PetroSA Board and the executives are focused on the preparation of the financial year-end reporting.
2. The PetroSA Board has not passed nor does it intend to pass any resolution to place the company under business rescue, as the company's financial year-end (March 31, 2017) reflects an adequate cash balance. Current assets and cash flow projections show that the company will have adequate cash resources for the business to carry on with its normal trading activities and meet its financial obligations for the foreseeable future. The present position of the company is that it is not in financial distress.
3. The company has correctly accounted for the abandonment liability and has set aside a partial amount in a special purpose vehicle towards meeting this obligation. It should be noted that this liability is not immediately due.
4. The company is planning for the scheduled maintenance shutdown of the refinery towards the end of 2017.
“PetroSA wishes to assure South Africans and our various stakeholders that as the Board and its employees we are committed to the sustainability, turnaround and long-term growth of the company. We are confident that the shareholder will give the necessary support, where appropriate, to ensure that we return the company to its former glory.”
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