Sasol subsidiary to sell stake in Texas business for $404m
Sasol Chemicals North America (SCNA), a wholly owned subsidiary of JSE-listed Sasol, has agreed principle terms with INEOS Gemini HDPE Holding Company and a new entity (Newco) to be formed by INEOS to sell its 50% membership interest in Gemini HDPE to Newco for $404-million.
Gemini, based in La Porte, Texas, produces and sells bimodal high-density polyethylene.
The sale represents a further step in achieving Sasol’s strategic and financial objectives by accelerating the focus on specialty chemicals and reducing net debt.
Proceeds from the transaction will be used by Sasol to repay near-term debt obligations.
Concurrent with the closing, Sasol will have completed the restructuring of its existing debt facilities and the security package in respect thereof, resulting in it and its subsidiaries being released from any existing security being provided in relation to Gemini.
The representations and warranties being given by SCNA are general corporate representations and warranties.
As disclosed in the Sasol financial statements, the value of the net assets relevant to the sale is $176-million (about R3-billion) as at June 30, which is net of the debt facilities associated with the interest.
The loss attributable to the net assets was $18-million (about R290-million) for the year ended June 30.
The sale between SCNA, INEOS and Newco will only be effective upon the restructuring of the existing debt facilities and the company’s security package in respect thereof.
Closing is anticipated to occur by December 31.
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