ICI sells stake in S African explosives jv

12 December 1997 14:27  [Source: ICIS news]

LONDON (CNI)--ICI has agreed to sell its 51% stake in South African based explosives business AECI Explosives Limited (AEL) to its joint venture partner AECI Limited for $117m in cash, the UK chemicals conglomerate said Friday.

AEL manufactures and supplies a range of bulk and packaged explosives, initiating systems and blast management services to the mining, quarrying construction and allied exploration industries in Africa.

Sales in 1996 were $221m and trading profit was $32m. AEL, which has its headquarters at Modderfontein near Johannesburg, had net assets of $54m at 31 December 1996 and employed about 3800 people. In its last trading statement, covering the six months to the end of June, AECI reported that its explosives business did not perform to expectations.

AEL has three main operating units, in South Africa, Ghana and Zambia, with export sales into The Congo, Zimbabwe and East Africa.

ICI said completion of the sale agreement is expected early in 1998. It will use the proceeds, which represent more than one times annual sales, to reduce group borrowings.

The disposal reflects ICI's policy of focusing on speciality chemicals, coatings and materials. Sales over the last few months have included its UK fertiliser business to Terra Industries of Iowa and its Canadian forest products business to Houston-based Pioneer Companies.

By: Neil Sinclair
+44 20 8652 3214

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