SOUTH AFRICA – Chemicals and energy group Sasol has entered into a $2billion agreement to sell part of its Lake Charles business in Louisiana in United States to multinational chemicals group LyondellBasell.
If approved by Sasol shareholders, LyondellBasell would pick up 50% of the Lake Charles base chemicals business and the two parties would form a joint venture.
Sasol has grappled with cost overruns at Lake Charles in recent years as 2020 has delivered an explosion at the facility, a hurricane, and a slump in oil price due to the Covid-19 pandemic.
Sasol had total debt of UD$11.8bn in its year to ending June which compares unfavourably with its market capitalisation of US$4.8billionn as at now.
“This investment represents a unique opportunity to bring together the best of both companies and create deep, long-term value while immediately realising the many benefits of new, strategically located, world-scale assets”
LyondellBasell CEO Bob Patel.
The transaction which is expected to be completed by the end of 2020 “represents a significant step for Sasol in achieving its financial and strategic objectives by reducing net debt and rapidly shifting the company’s portfolio towards speciality chemicals,” Sasol statement said.
“LyondellBasell is the ideal partner to ensure the success of these world-class assets with its deep expertise in commodity chemicals,” said Sasol CEO Fleetwood Grobler.
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“This investment represents a unique opportunity to bring together the best of both companies and create deep, long-term value while immediately realising the many benefits of new, strategically located, world-scale assets,” said LyondellBasell CEO Bob Patel.
Sasol, whose share has fallen by more than three quarters over the past two years, said it was still working on a rights offer of up to $2bn in the first six months of 2021.
LyondellBasell Industries N.V. is a Dutch-domiciled multinational chemical company with American and British roots incorporated in the Netherlands with U.S. operations headquarters in Houston, Texas and offices in London, UK.
The company is the largest licensor of polyethylene and polypropylene technologies and one of the largest plastics, chemicals and refining companies in the world.
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