(Reuters) – Sasol (SOLJ. J) agreed to sell the world’s largest oxygen production site in Secunda, South Africa, to France’s Air Liquide (AIRP.PA) for about 8.5 billion rand ($515 million) because it sells assets to pay off debts and a rights problem.
Sasol, the world’s largest coal fuel manufacturer, said Wednesday that it had reached an agreement to sell the 16 air separation units, which have a capacity of 42,000 tons consistent with the day and produce oxygen for their fuel and chemical production processes like other gases.
The move is part of Sasol’s preference to sell its assets amid the coronavirus crisis and falling oil prices, which have left the company, which already suffers with a massive chemical allocation in the United States, potentially facing a $2 billion rights problem.
Air Liquide, a commercial fuel company that has been in operation since 1979 and already owns and operates some other air separation unit, has announced that it will launch a multi-year facility modernization plan.
“(The transaction) will allow Air Liquide and Sasol to continue with their core business, combining operational power and reducing CO2 emissions,” said Benoit Potier, President and CEO of Air Liquide, which will supply fuel to Sasol if the transaction materializes at the forefront.
Sasol added that corporations aim to negotiate final deals until mid-August, and the deal is expected to close in fiscal year 2021.
Reporting through Athrough Jose Koilparambil in Bangalore and Emma Rumney in Johannesburg; Editing through Bernard Orr and Mark Potter
All quotes were delayed for at least 15 minutes. See here for a complete list of transactions and delays.
© 2020 Reuters. All rights are reserved.