South African chemicals and energy group Sasol has announced it has entered into a US$2billion agreement to sell part of its Lake Charles business in Louisiana in United States to multinational chemicals group LyondellBasell.
Assuming the deal gets approval from Sasol shareholders, LyondellBasell would own 50% stake in the Lake Charles-based chemicals business and the two parties would form a joint venture.
“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 189.7 billion rand ($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.”
“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.