Sasol reaches agreement for disposal of air separation units
JOHANNESBURG - Integrated chemicals and energy company Sasol said on Thursday it had concluded negotiations and entered into a sale of business agreement with Air Liquide to dispose of its air separation business in Secunda, South Africa, for about R8.5 billion (US$509.5 million) to be settled in United States dollars.
The company announced in July that its major subsidiary, Sasol South Africa (SSA), had signed an exclusive negotiation agreement with Air Liquide for the sale of SSA’s sixteen air separations units and associated business in Secunda.
Air Liquide, a world leader in gases, technologies and related services which operates in 80 countries with approximately 67,000 employees, has provided technical and engineering support to Sasol in Secunda since 1979.
The business set for disposal comprises sixteen air separation units (ASUs) and related assets with a combined capacity of up to 42,000 tons of oxygen per day, which provide oxygen for Sasol’s fuels and chemical production processes.
The units produce various other gases utilised at Secunda and rare gases sold externally.
Employees at the business will transfer to Air Liquide as part of the arrangement.
Subsequent to the transaction, Air Liquide will supply various gases to Sasol South Africa’s operations under a long-term gas supply agreement with an initial term of 15 years.
“Air Liquide will take full ownership and overall responsibility for managing the ASUs, including all future capital and operating requirements, to maintain the agreed quantity and quality of gases supplied to Sasol,” Sasol said.
“Total estimated capital expenditure of R8 to 12 billion would have been spent by Sasol over the next 15 years. The ASUs require significant capital to sustain reliable operations, as well as improved efficiencies to enable decarbonisation.”
The deal forms part of Sasol’s expanded and accelerated divestment programme announced in March.
Air Liquide will settle the deal amount in cash following satisfaction of suspensive conditions contained in the sale agreement.
Sasol said it anticipated that the transaction would result in additional cash outflow for it of approximately R650 million to R 1.2 billion per annum in real terms, over the term of the agreement.
“This estimate is largely dependent on the energy efficiency benefits which are achieved over time,” it said.
The deal is subject to approval by competition authorities and the South African Reserve Bank, as well as provision by Sasol Limited of a guarantee in favour of Air Liquide, as security for Sasol South Africa’s obligations under the gas supply agreement.
African News Agency