The petrochemical giant, Sasol has agreed to a deal to sell a 50% share of its troublesome Lake Charles project in the United States for US$2 billion (R33.3-billion).
Due to its high debt levels struggle, reduced demand and volatile oil prices, in June Sasol announced a restructure of the business, the closure of some operations and retrenchments.
The agreement is still subject to shareholder approval, it will enable Sasol to cut around 20% of its long-term debt of around US$10-billion, while still enabling the business to hopefully experience the fruits of its investment and labours in Lake Charles.
According to the integrated energy and chemical company, the transaction will conceive a joint undertake with LyondellBasell, concerning the Base Chemicals Business at Lake Charles and the associated land.
Sasol said they would retain ownership and the US Performance Chemicals Business – the other legacy base chemicals assets at Lake Charles – and the remainder of the Lake Charles property. “The intention was to generate significant proceeds to apply towards outstanding debt while enhancing the benefits to be gained from the substantial investment in Lake Charles by partnering with a company with world-class capabilities in commodity chemicals in the industry,” Sasol noted in a statement to the JSE’s Stock Exchange News Service.
“Through this process it became clear that the proposal that offered the best combination of upfront and the long-term value was that offered by the LyondellBasell group.”
LyondellBasell is a large multinational plastics, chemicals and refining company headquartered in Rotterdam, Netherlands. It has assets of more than US$35 billion, which is equivalent to R576-billion and employs around 19 000 people.
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