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MOSCOW (MRC) -- Ineos has agreed
principle terms with Sasol (Johannesburg) for the USD404-million acquisition of
the South African company’s 50% ownership stake in their Gemini high-density
polyethylene (HDPE) manufacturing joint venture at La Porte, Texas, according to
Chemweek.
The target closing date
for the acquisition is 31 December, the companies say.
Ineos Olefins and
Polymers (O&P) USA, a wholly owned subsidiary of Ineos, will become the sole
owner of the 470,000-metric tons/year HDPE unit. The company has been the
operator of the Gemini plant located within Ineos’ Battleground manufacturing
complex since its startup in 2017. The proposed purchase from Sasol subsidiary
Sasol Chemicals North America will allow it to “further expand its reach” in the
rapidly growing specialty PE markets for pressure pipe and high molecular weight
film, it says. It will also “increase Ineos Group’s global HDPE market share and
strengthen its ability to service the rapidly growing bimodal markets,” it adds.
The transaction is subject to financing and other customary adjustments.
“We are excited about the opportunity to acquire Sasol’s half of Gemini.
This world-class asset is positioned to serve the growing global bimodal markets
and would allow our business to meet increased demand from our customers,” says
Ineos O&O CEO Michael Nagle. Ineos has four other production plants with
767,000 metric tons/year of total HDPE capacity at Deer Park,
Texas.
Sasol president and CEO Fleetwood Grobler says the divestment
“continues the transformation of Sasol’s chemicals business toward specialty
chemicals markets.” Proceeds from the transaction will be used to repay
near-term debt obligations, the company says. The value of the net assets
relevant to the sale was USD176 million as at 30 June 2020, which is net of debt
facilities, as disclosed in Sasol’s financial statements, it says. The loss
attributable to the net assets was USD18 million for the financial year ended 30
June, with the proposed sale to only be effective upon restructuring of the
existing debt facilities, it adds.
In October, 2020, as MRC reported
before, Sasol agreed to form an equal JV with LyondellBasell, with
LyondellBasell to pay USD2 billion to acquire 50% of Sasol’s new 1.5-million
metric tons/year steam cracker, and low-density polyethylene (LDPE) and linear
low-density polyethylene (LLDPE) plants at Lake Charles, Louisiana. That
transaction is also expected to close by the end of the year.
According
to MRC's ScanPlast
report, September estimated HDPE consumption in Russia fell to 55,790 tonnes
from 119,750 tonnes a month earlier. ZapSibNeftekhim increased its export
polyethylene (PE) sales. Kazanorgsintez's production capacities were also shut
for a turnaround. Overall HDPE shipments to the Russian market totalled 911,650
tonnes in the first nine months of 2020, up by 6% year on year. Production grew
significantly, whereas imports slumped by 27%.
Sasol is an international
integrated chemicals and energy company that leverages technologies and the
expertise of our 31 270 people working in 32 countries. The company develops and
commercialises technologies, and builds and operates world-scale facilities to
produce a range of high-value product stream, including liquid fuels,
petrochemicals and low-carbon electricity.
INEOS Group Limited is a
privately owned multinational chemicals company consisting of 15 standalone
business units, headquartered in Rolle, Switzerland and with its registered
office in Lyndhurst, United Kingdom. It is the fourth largest chemicals company
in the world measured by revenues (after BASF, Dow Chemical and LyondellBasell)
and the largest privately owned company in the United Kingdom. |
