Sasol’s headquarters in Rosebank, Johannesburg
Cape Town – South Africa’s petrochemical company Sasol has sold its stake in an Iranian polymer company – Arya Sasol Polymer joint venture and now has no business dealings in Iran at all.
Sasol sold its 50% stake in Arya Sasol Polymer to Main Street 1095, the South African subsidiary of an Iranian investor. The director of the company is Hamidreza Eskandani. The other 50% is owned by Iran’s state-owned National Petrochemical Company.
In July 2012 the US government extended its sanctions on Iran to prevent non-US companies from conducting any business in oil or oil related products in or with Iran.
The United States continues to impose new layers of sanctions on Iran and last month the laws were extended to target other areas of the Iranian economy for sanctions, including exchange transactions involving Iranian Rials and Iran’s automotive industry.
The laws also extended the existing sanctions affecting the petrochemical industry.
The venture was responsible for a nearly R3bn knock in Sasol’s results for the half-year to end-December 2012, when it took a R1.9bn partial impairment on the polymer plant and a R1bn forex hit as international sanctions against Iran knocked the rial.
The synthetic fuels group said in a statement to the JSE on Monday that its wholly owned Sasol Investment Company subsidiary had entered an agreement with a local subsidiary of its Iranian joint-venture partner to buy all of SPI International, the indirect owner of a 50% interest in Arya.
Sasol hinted at such a sale when it released its interim results in March 2013. Chief financial officer Christine Ramon said at the time that the group had signed a memorandum of understanding with an undisclosed party over the future of the facility. This was part of a “highly sensitive and confidential process”.
In June, Sasol said it was progressing with the sale but the process was slower than anticipated. It also warned that the devaluation of Iran’s rial may have a further negative effect on earnings.
Sasol said in Monday’s statement that the fair value of its investment in Arya was written down to R2.3bn, based on the group’s assessment of the fair value of Arya as well as the accounting requirement to recognise an operating profit of approximately R1.6bn for the second half of the 2013 financial year.
Last year Sasol stopped buying Iranian crude oil. It used to procure about 20% of its crude requirement from Iran which was then processed at its refinery in Sasolburg.
