Sasol, the world's largest fuel from coal producer, on Friday said it had not made any provisions for the €318.3-million (R3.8-billion) fine imposed by the European Commission (EC).

Europe's antitrust watchdog this week fined Sasol for its part in a paraffin wax cartel and violating antitrust laws.

"We were unable to provide for it financially because we did not know the extent of the fine," explained Sasol CEO Pat Davies.

Davies said the group "certainly did not anticipate the magnitude of the fine".

But Davies said the group would immediately make provisions for the fine in its accounts.

He said while the company would not restate its FY08 financials, it would provide for the R3.8-billion immediately.

This means it would be reflected in the company's current financial year's result.

A strong cash flow generator

"The money will come from our internal treasury. We are fortunate to be a strong cash flow generator and have a strong balance sheet," said Davies.

The fine will impact on the company's operating profit line but was not expected to have any impact on the company's expansion plans.

Sasol has three months to settle the fine.

Under European regulations it must settle the fine before making an appeal.

"As we see things now, we intend to appeal," said Davies, adding that the basis of the appeal would be guided by the details of the EC's findings.

Such an appeal, if it was pursued, could take years while the appeal took its course.

As a result, the R3.8-billion in the EC's account by Sasol would be tied up for years before it knew whether it would have any of the money returned.

Sasol said in a statement further explaining its position on the EC's findings, that while a fine was expected, it did not anticipate the magnitude of the fine, particularly in the light of not being the legacy owner.

"We do not yet have the detailed reasoning from the EC and will study it, as soon as it is supplied, to clarify our next steps," said Sasol.

At 2.40pm shares in Sasol were 1.30 rand lower at 313 rand on the JSE.

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