Photo by: Bloomberg
South Africa's Sasol said on Wednesday its Louisiana Integrated Polyethylene joint venture (JV) with chemical company LyondellBasell Industries had been established, following closure of the deal on Dec. 1.
LyondellBasell agreed in October to acquire a 50% stake in Sasol's base chemicals business at Lake Charles for $2 billion and operate the newly formed 50/50 JV, comprising the base chemicals business.
The South African petrochemicals company also said it had reached an agreement with its lenders on covenant amendment for Dec. 31 and that the covenant for June 2021 will remain at 3x net debt: earnings before interest, taxation, depreciation and amortisation.
Investors have been concerned by the company's debt, which has been exacerbated by delays and cost overruns at its Lake Charles Chemicals project (LCCP) in Louisiana and prompted the resignations of its joint chief executives to restore shareholder confidence.
Sasol's total debt was 189.7 billion rand ($12.34 billion) for the year to June 30.