ICI's disposal programme draws to a close

ICI is this week expected to announce it has almost completed an extensive three-year disposal programme with the sale of its remaining industrial chemical operations for about £300m.

The company is understood to be in advanced talks to off-load a clutch of businesses, including Klea and Crosfield, to Ineos, the privately owned chemicals group which last year bought ICI's acrylic operations for £505m.

The deal, likely to be announced along with third-quarter figures on Thursday, involves businesses earmarked for sale since ICI acquired Unilever's speciality chemicals business three years ago. It will also make Ineos, which is reportedly being backed by Charterhouse Development Capital, Britain's second largest chemicals company.

Last night industry sources said the agreement meant ICI would have achieved its main aims and only a handful of businesses remained to be sold.

These are understood to in clude a plant in Pakistan which makes PTA, a material used in the manufacture of polyester fibre.

There is, however, also speculation that Charles Miller Smith, ICI's chairman, may announce a dramatic cut in dividend on Thursday in the wake of the disposals.

Reports suggested he will signal to investors the board's intention to cut the dividend, which currently stands at 32p a share, by a third from next year onwards.

Three years ago the board announced it intended to maintain the dividend while the restructuring was being carried out and review it after sales had been agreed.

As well as Klea, the company's CFC replacement, and Crosfield, which makes silica additives for detergents and toothpaste, ICI is also getting rid of its loss-making halochemicals side.

The company has been searching for a buyer for this business, which makes chlorine and hydrochloric acid, since 1997 but potential buyers have been put off due to the heavy losses it incurs.