In a debt crisis for several years now, the South African petrochemical company, Sasol, has already started to divest part of its assets in Mozambiqueto pay off a huge debt that pushed the company into an unprecedented crisis, following some badly stalled deals. Indeed, after having announced last December an agreement with Azura Power to buy its entire stake in the Ressano Garcia Thermal Power Plant (CTRG) for $145 million, that company recently agreed to sell a 30% stake in the natural gas pipeline from Mozambique to South Africa for up to R5.1 billion.

The deal is part of an accelerated asset sale program that will help Sasol reduce borrowings that have increased amid cost overruns at a giant chemical project in the United States.

The company began looking for a buyer for its pipeline shares last year as it examined ways to bolster its finances amid growing pressure from creditors.

Sasol will sell its stake in the Rompco pipeline to a group of buyers, including Old Mutual, the company said in a statement on Friday. The fuel and chemical manufacturer will retain a 20% stake and will continue to operate and maintain the 865-km link.

The Rompco line - short for Republic of Mozambique Pipeline Investment - currently transports gas from the Pande and Temane fields in Mozambique to Sasol's operations in South Africa. Once those resources are depleted, it could be a potential route to market for liquefied natural gas arriving at the planned Maputo terminal.

The sale comprises an initial consideration of R4.1 billion and a deferred payment of up to R1 billion if certain milestones are reached by the end of June 2024. The deal is expected to take effect in the second half of this year.

The buying consortium includes Reatile Group, a black-owned South African investment firm focused on energy and petrochemicals, along with IDEAS Fund, an infrastructure equity fund managed by African Infrastructure Investment Managers, which is a subsidiary of Old Mutual.

Old Mutual was cited as an early mover in October, as was France's Total, with the suggestion that Sasol divest its entire 50% stake. The South African and Mozambican governments each own 25% of the Rompc line.