Brazil’s Fertilizantes Heringer SA, Viana, may wind up under the control of Russian players Uralkali Group and Uralchem Group pending regulatory approval, according to Brazil regulatory filings. Controlling shareholder Heringer Participacoes and its quotaholders executed a binding letter of intent with Uralkali and Uralchem to subscribe for the new issuance of common shares, in Heringer’s capital increase, for 2 reals per share.
After the completion, Uralkali and Uralchem will hold shares representing the control of Fertilizantes Heringer. The total amount of capital increase will be no less than $59 million and no more than $115 million.
Uralkali and Uralchem are already active in Brazil, selling potash and nitrogen, respectively. Heringer, which filed for judicial recovery/bankruptcy in February (GM Feb. 8, p. 1; April 12, p. 27) at last count has eight blending plants in the country, up from seven earlier this year. It had 19 running in late 2018 (GM April 19, p. 26). As of August, the company was down to seven plants, but it reported this week that its Tres Coracoes – MG blending plant in the state of Minas Gerais, a major coffee growing area, is returning to production on Oct. 1.
While Heringer results have improved, they still remain in the loss column (GM Aug 30, p. 29). Heringer reported a six-month 2019 net loss of R110.6 million on revenues of R325.9 million, versus a year-ago loss of R324.1 million and R1.93 billion, respectively. Sales volumes dropped to 203,672 mt from the year-ago 1.59 million mt.
A group led by the Heringer family has had control of Heringer with a 51.5 percent stake. The company free float was 29 percent, with Nutrien Ltd., Saskatoon, and OCP SA, Casablanca, each having approximately 10 percent of the company.
In 2018, Nutrien, which has been expanding its position in Brazil, was rumored to be in talks with Heringer (GM May 11, 2018). Heringer, which was founded in 1968, in 2018 was one of Brazil’s largest companies engaged in the production, sale, and distribution of basic and specialty fertilizers, with a production capacity put at 4.7 million mt/y.