Israel Chemicals said on Thursday it had agreed to sell its fire-safety and oil-additive units to SK Capital for around $1 billion, mostly in cash, as the company seeks to exit non-core operations and raise money to repay its debt.
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“This sale constitutes another step towards fulfilling the targets of focusing ICL’s businesses and selling low synergy assets,” said ICL Executive Chairman Johanan Locker. “The divestment will reduce debt leverage, and provide flexibility for the development of innovation and growth in ICL’s specialty products and in precision agriculture.”
ICL is seeking to pay down some $3.3 billion in debt and maintain its credit rating. The company held discussions with the UK company Sirius Minerals to sell its British mining operations for as much as $200 million, September reports stated, and in June agreed to sell its 50% stake in water-desalination firm IDE Technologies for $178 million to an Israeli investor group.
Last year, the company sold its Clearon water-treatment unit to China’s Dalian Hui Yu Xin Technology Development Company.
Shares of ICL ended unchanged at 14.21 shekels ($4.04).
The two businesses are part of its ICL Specialty Solutions’ Advanced Additives business line, which has operations in North and South America, Europe, Australia and Asia but not Israel. ICL acquired them in 2005 when it bought the U.S. company Astaris for $255 million.
The fire-safety unit, which supplies chemicals and services used in fighting forest fires, has enjoyed a large increase in sales after a series of intense wildfires in North America and Europe. Its oil additives are used to manufacture lubrication oil additives, mining chemicals and pesticides.
In the 12 months since last September, the units contributed $294 million to ICL’s sales and $112 million to operating income. The sale to SK Capital is expected to be completed in the first half of 2018.