MOSCOW (MRC) -- ExxonMobil Corp, one of the world's petrochemical majors, is exploring a sale of its Advanced Elastomer Systems (AES) division, potentially valuing the elastic polymer maker at around USD800 million including debt, reported Reuters with reference to people familiar with the matter.
The deal would allow the oil major to nibble at its debt pile, which totaled USD45.5 billion at the end of December. Its shares are up around 37% year-to-date on investor expectations that the company will benefit from a recovery in energy prices.
Exxon has hired investment bank Morgan Stanley to solicit interest in AES from potential buyers, including private equity firms, the sources said. The sources cautioned that no deal is certain and requested anonymity because the matter is confidential. Exxon and Morgan Stanley declined to comment.
Exxon incurred a historic loss of USD22.4 billion last year. It is trying to convince a skeptical Wall Street that it can rebound after years of overspending left it deeply indebted and lagging rivals better geared for a world demanding cleaner fuels.
AES is known for its Santoprene thermoplastic vulcanizates (TPVs), which are elastic polymers used in automotive, industrial and consumer products. The business was launched in 1991 as a limited partnership between ExxonMobil Chemical and Solutia. Exxon became the sole owner of AES in 2002.
The global TPV market is seen growing from USD1.6 billion in 2019 and to USD2.6 billion in 2027, though the industry has been adversely affected by the COVID-19 pandemic due to factory shutdowns and supply chain issues, according to a report by ResearchAndMarkets.com.
As MRC informed previously, Sinopec Engineering (Group) and ExxonMobil (Huizhou) Chemical (EMHCC) have just entered into a BEPC (basic design, engineering, procurement and construction) contract for the proposed Huizhou Chemical Complex Project (Phase I). The main units of the project include a 1.6 million tonnes/year ethylene flexible feed steam cracker, downstream polymer and derivative units and utilities. The main product units include two performance polyethylene (PE) lines and two differentiated performance polypropylene (PP) lines.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.
ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.