[ad_1]
The management of the petrochemical giant Sasol will be relieved by the announcement on Friday that the company has agreed to a deal to sell a 50% stake in its troubled Lake Charles project in the United States for US $ 2 billion (R33.3-million ).
Sasol has been battling high debt levels, declining demand and volatile oil prices for some time, to the point where in June it announced a business restructuring, closing of some operations and cuts.
Part of the debt burden is due to the Lake Charles chemical project in the US state of Louisiana, which has been hit by significant delays and cost overruns.
So much so, that joint CEOs Bongani Nqwababa and Stephen Cornell resigned in 2019 due to cost overruns that some media reports have called a ‘fiasco’.
Reduce a portion of long-term debt
But the $ 2 billion deal, which is still subject to shareholder approval, with LyondellBasell for a future joint venture will allow Sasol to cut about 20% of its long-term debt of about $ 10. billion, while still allowing the business. to hopefully enjoy some of the fruits of your investment and labor in Lake Charles.
According to Sasol, the transaction will create a joint venture with LyondellBasell, related to the basic chemicals business in Lake Charles and associated lands.
It said it would retain the US performance chemicals property and business, the other inherited base chemical assets in Lake Charles, and the rest of the Lake Charles property, allowing it to use vacant land to develop further. facilities on the property.
Enhance the benefits of the project
“The intent was to generate significant revenue to apply to 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 basic chemicals in the industry,” Sasol noted in a statement. to the JSE Stock Exchange News Service.
“Through this process it became clear that the proposition that offered the best combination of initial and long-term value was the one offered by the LyondellBasell group.”
LyondellBasell is a large multinational plastics, chemicals and refining company based in Rotterdam, the Netherlands. It has assets of more than $ 35 billion and employs about 19,000 people.
[ad_2]
