⁍ Chemical company LyondellBasell Industries has agreed to acquire a 50% stake in a unit of its U.S-based business for $2 billion.
⁍ The two companies will form a 50/50 joint venture which will take over the base chemicals business at Lake Charles.
⁍ South Africa’s Sasol has been battling high debt amid lower oil and chemicals prices.
– LyondellBasell Industries has agreed to buy a 50% stake in Sasol’s base chemicals business in Louisiana for $2 billion, in a move that will help the South African company cut its debt, Reuters reports. The deal will create a 50/50 joint venture that will take over Sasol’s seven manufacturing units at Lake Charles, which produces cleaning, detergents, and cosmetics. Sasol will retain its ownership of the other two units at Lake Charles, as well as the original ethane cracker there. “The transaction will represent a significant step towards achieving Sasol’s strategic and financial objectives by materially reducing net debt,” the company said in a statement. The world’s top manufacturer of motor fuel from coal has been battling high debt amid lower oil and chemicals prices, prompting it to search for a partner at the Louisiana-based plant and propose a rights issue of up to $2 billion in 2021. The company’s total debt stood at $11.35 billion for the year to June 30, exacerbated by years of delay and cost overruns of around $4 billion compared to early estimates in building LCCP (Lake Charles Chemical Project), prompting the resignations of its joint chief executives in 2019. “(The company) is swinging more to an improved balance sheet,’ said Sasol’s Chief Financial Officer Paul Victor during a conference call. “The market had a perception that if they could get a deal with Lake Charles they wouldn’t need a rights issue but … looks like they still have too much debt.”
Source: https://www.reuters.com/article/us-sasol-m-a-lyondellbasell/sasol-to-raise-2-billion-in-part-sale-of-us-chemicals-unit-to-lyondellbasell-idUSKBN26N0Q0