Sandvik has completed the previously announced divestment of Sandvik Drilling and Completions (Varel), meaning the operations relating to the oil and gas industry to the private equity firm Blue Water Energy and its co-investor, the privately owned Nixon Energy Investments.
Sandvik will remain a minority owner of 30% of the company and hold a position on the board. The contribution to Sandvik’s earnings per share from the minority ownership, reported in associated companies, would have been limited based on 2019 results.
In the results for 4Q19, Sandvik reported a related write-down of net SEK-3.9 billion. In the subsequent period until closing of the deal, changes in net assets imply a negligible capital gain however the realised effect from reversal of the accumulated currency translation in other comprehensive income will have a negative impact of SEK-0.5 billion on the operation result in other operations for the 1Q20. The closing of the divestment results in a positive cash flow impact of about SEK0.7 billion during the 1H20, net of transaction costs.
As of the 2Q20, other operations will not include any active operations. The minority owned company will be incorporated in group activities.
Read the article online at: https://www.globalminingreview.com/finance-business/17032020/sandvik-completes-the-divestment-of-sandvik-drilling-and-completions/