Sasol Form 20-F for the year ended 30 June 2021 - Book - Page 18
availability of critical resources to continue operations.
The risk may extend to the availability of senior
leadership, specifically senior executives, in the
organisation challenging the efficacy of our alternate
arrangements and succession plans. Our operations
have, to some extent, been impacted by lower employee
morale, resulting in disengagement and reduced
productivity.
reference rate in terms of rapidly developing marking
practice being established by the Loan Markets
Association (LMA) prior to any cessation of LIBOR
there can be no assurance that we will be able to reach
agreement on favourable terms or at all. We have an
engagement plan, and we are actively engaging with
our counterparties to reach agreement on an alternative
basis. Any agreement on an alternative benchmark rate
may however negatively impact the value of our credit
facilities, term loan or derivative instruments, may
expose us to additional financial, tax, legal, operational
or other costs, or expose us to additional interest raterelated risks, such as different alternative reference
rates.
Additionally, COVID-19 could negatively
affect our internal controls over financial reporting as
some of our workforce is required to work remotely
and therefore new processes, procedures, and controls
could be required to respond to changes in our business
environment. This is further exacerbated by the
increased demand on employees as activities increased
on the launch of our optimisation of the business
through Sasol 2.0, change in our operating model and
the workforce transition process.
There may be restrictions imposed on certain
market participants as to use of LIBOR for new
financial instruments, including hedging, and we may
not be permitted to hedge our remaining LIBOR
exposures or any such hedging, if undertaken, may be
more expensive.
As the impact of COVID-19 continues to
evolve, the outbreak of any potential future waves of
infection or mutations in the strain of the virus may
continue to have, and also increase having, a negative
impact on our business performance. We expect that the
ultimate magnitude of these disruptions, including the
extent of their adverse impact on our financial and
operational results, will be determined by the length of
time that such disruptions continue, which will, in turn,
depend on the duration of the pandemic, the time taken
to access and administer vaccines and the impact of
governmental regulations that might be imposed in
response to it. The most material challenges faced by
Sasol are the ability to anticipate or model infection
rates, local / regional / global spread patterns, recovery
and mortality rates, potential for future recurrent
infection waves and the resultant direct and indirect
impacts on our business and continuity of our
operations.
Risk related to COVID-19
Our global operations expose us to pandemics, such
as the COVID-19 pandemic, that may adversely
affect our workforce and impact business
continuity, operating results, cash flows and
financial condition
Sasol’s global workforce, including service
providers, suppliers and customers, are exposed to the
COVID-19 pandemic which can impact their
wellbeing, safety and health with an associated direct or
indirect effect on the safety and continuity of our
operations. An increased rate of COVID-19 infections
among our workforce, service providers, suppliers and
customers, and the related impact on prices and demand
for our products has had and may continue to have a
material adverse effect on Sasol’s business, operating
results, cash flows and financial condition.
A key challenge is the impact of the pandemic
on the commodity markets, including the demand for
our products, which is not under our control. As we
cannot predict the spread of the virus and the impact on
the economy in the countries in which we operate,
COVID-19 may have an increasingly negative impact
on our business, operating results, cash flows and
financial condition, and even put Sasol’s financial
viability at risk.
A large portion of our South African and
Mozambican workforce is directly or indirectly
exposed to living environments where home quarantine
and self-isolation pose practical challenges. This is
exacerbated by a slower-than-preferred roll-out of the
COVID-19 vaccination process, especially in South
Africa and Mozambique and by ongoing changes in
laws and regulations in response to the COVID-19
pandemic, imposing restrictions on the movement of
people and products/assets, as well as activities, that
can be performed in the countries and jurisdictions in
which Sasol operates and increasing the risk of
The pandemic impacted, and continues to
impact, all economies in which we operate. The current
impact varies among the countries and it is difficult to
predict the further development of such impact. A
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