Yara Industrial has entered into an agreement to sell its shareholding of 70.85 per cent in Ceylon Oxygen to Actis South Asia Fund 2 LP.

Yara spokesman Hamed Brodersen told gasworld that the divestment is part of Yara's strategy to streamline operations. He said: "We felt that other companies are able to develop the company better than we would.

"Ceylon Oxygen also has limited synergies with Yara's core business."

Yara's book value of Ceylon Oxygen is NOK50m ($8m), and the transaction is estimated to give Yara a profit of NOK15m ($2.4m). Yara expects to conclude the deal during third quarter 2006 subject to certain statutory approvals.

Ceylon Oxygen is listed on the Colombo Stock Exchange and holds an overall 80 per cent market share in the Sri Lankan gas market. Cylinder gases constitute about 60 per cent of the company's sales revenues.