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Sasol is writing down the value of the olefins and surfactants business it put up for sale a year ago.
Sasol acquired the business, then called Condea, in March 2001 from RWE Dea for approximately $1.6 billion. At the time, Sasol points out, the price of oil was about $20 per barrel, a level that gave the business sustainable profit margins. Since then, however, the price of oil has risen inexorably and now sits at about $70 per bbl, depressing the operating performance of the business and reducing its potential value to other companies.
"After a review of valuations and bids received from interested parties," the company says, "it is necessary to write down the net asset value of the business to its fair value." As a result, Sasol is taking a charge of about $390 million to its financial statements for the fiscal year that ended on June 30.
Sasol says it will be entering negotiations with prospective new owners of the unit "in the coming months."
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