Troubled Australian polyethylene producer Qenos Holdings Pty. Ltd. has an agreement to be sold to Chinese government-owned China National Chemical Corp., known as ChemChina.
Melbourne-based Orica Ltd. and its U.S. joint venture partner Exxon Mobil Corp., which each hold a 50 percent stake in Qenos, announced the deal Oct. 31. The sale is subject to Australian and Chinese regulatory approvals, but the firms expect the transaction to be completed by early 2006.
Orica said it will be hit with an after-tax loss of A$34 million (US$25.3 million) from a debt restructuring of Qenos in September 2004 and sale-transaction costs.
The sale price was not disclosed, but industry speculation has put the figure at about A$200 million (US$148.7 million), well below the initial A$300 million (US$223 million) expected earlier this year.
Ross McCann, Qenos chief executive officer, said the purchase fits ChemChina's global growth plan.
``The acquisition provides a strong Australian platform for further business growth. Qenos is an attractive acquisition for ChemChina given its highly skilled workforce, technical expertise, strong customer base, logistics infrastructure and operational systems,'' he said.
ChemChina, headquartered in Beijing, has forecast an A$9.6 billion profit (US$7.1 billion) for 2005, and has total assets of A$11.2 billion (US$8.3 billion).
Qenos is Australia's sole PE manufacturer and has annual sales of A$800 million (US$595 million). It produces 397 million pounds of high density PE, 198 million pounds of low density PE, and 265 million pounds of linear LDPE a year. Qenos also makes 88 million pounds of polypropylene, 1.1 billion pounds of ethylene, 110 million pounds of propylene, and 44 million pounds of butadiene annually.