Sandvik completes the divestment of Sandvik Drilling
23 March 2020
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.
In the results for the Q4 2019, Sandvik reported a related write-down of net –SEK 3.9bn. In the subsequent period until the closing of the deal, changes in net assets imply a negligible capital gain however the realized effect from the reversal of the accumulated currency translation in Other Comprehensive Income will have a negative impact of –SEK 0.5bn on the operation result in Other Operations for the Q1 of 2020. The closing of the divestment results in a positive cash flow impact of about SEK 0.7bn during the H1 of 2020, net of transaction costs.
As of the Q2 of 2020 Other Operations will not include any active operations. The minority-owned company will be incorporated in Group Activities.