FINANCIAL TIMES: Sanctions threat to NPC bid for Basell: “NPC is one of the three bidders that have been shortlisted to buy the petrochemicals company from its joint owners Royal Dutch/ Shell and BASF.” (ShellNews.net) 16 Feb 05
By Lina Saigol in London
Published: February 16 2005
National Petrochemical Company, the Iranian-owned group, could find its €4.4bn ($5.7bn) bid for Basell blocked because of US sanctions against Iran.
NPC is one of the three bidders that have been shortlisted to buy the petrochemicals company from its joint owners Royal Dutch/ Shell and BASF. It is competing against bids from privately owned Ineos Chlor and an investment group led by Chatterjee of India that includes Haldia Petrochemicals and Merrill Lynch, among others.
In a confidential memo sent to Basell employees and obtained by the FT, Volker Trautz, Basell president and chief executive, said: "The inclusion of NPC creates a special situation due to US regulations regarding Iran. As such, shareholders' transaction process activities related to NPC are being carefully considered to ensure there is full compliance with US law."
In recent weeks, concerns have been growing in corporate boardrooms across the globe about Iran's alleged nuclear ambitions. Last month, BP, the UK-based oil group, said it did not want to be involved in any investment in Iran until it received the green light from Washington.
Since then, General Electric of the US has said it would no longer accept any new business in Iran, while Halliburton, the US oilfield services and logistics group, has said it would only complete existing contractual obligations in Iran.
The US has maintained various sanctions against Iran since 1979, following the seizure of the US embassy in Tehran.
In March and May 1995, President Bill Clinton signed two Executive Orders prohibiting US companies and their foreign subsidiaries from conducting business with Iran, although these have been progressively rolled back. However, people close to Basell said NPC was working out a deal structure that would allow it to circumvent the sanctions.
NPC could not be reached for comment. Basell declined to provide further details and Shell and BASF declined to comment.
The memo said the three finalists were moving at an "aggressive" pace. It went on to say: "The Nell [code name for the sale of Basell] will become more intense, in terms of resource requirements and pace of activities, as we move into this final phase - heavily influenced by the goal to complete the transaction by the end of the second quarter."