Morocco may sell a stake in phosphates fertilizer major OCP Group SA as the cash-squeezed country seeks to benefit from record fertilizer prices, Bloomberg reported this week. The proposal is part of a wider move by the Moroccan government to sell interests in state-owned entities.
The Moroccan government owns a 95% stake in OCP, which saw its phosphate and derivatives sales double in the first five months of this year, to May 30, compared with the same year ago period, reaching MAD 47.62 billion (approximately $4.56 billion at current exchange rates), according to a Morocco World News report last week, citing new data from the country’s Foreign Exchange Office (GM July 8, p. 25).
The government in a decree has given the green light for OCP to set up a new company assembling several of the group’s subsidiaries under one enterprise, according to a separate Morocco World News report, citing the government’s Official Bulletin.
The new company – to be named OCP Nutricrops – will have a paid-up capital of MAD13.8 billion (approximately $1.3 billion), and it may tap debt markets and allow investors to buy shares, according to the report.
OCP Nutricrops will merge three of the phosphate fertilizer group’s wholly-owned Jorf Lasfar-based production subsidiaries into the new company: Jorf Fertilizers Co. I, Jorf Fertilizers Co. II, and Jorf Fertilizers Co. IV.
It will also incorporate Jorf Fertilizers Co. III, and Jorf Fertilizers Co. V. JFC III is 50% owned by OCP, and following the recently completed deal with the U.S.’s Koch Ag & Energy Solution LLC, is 50% owned by a Koch affiliate of U.S.’s Koch Ag & Energy Solution LLC (GM July 1, p. 29; March 4, p. 1).
OCP owns a 60% stake in JCF V.
OCP Nutricrops will have “flexibility and various options in terms of financing, and in particular in relation to opening up its capital,” according to the report, citing the decree. The new company’s turnover is projected to average MAD30.6 billion between 2022 and 2025, according to the report.
The main activity of OCP Nutricrops will be the production of phosphoric acid, phosphate fertilizers, and NPKs, as is the case currently, and according to the report, phosphate-based chemicals, and will aim to accelerate the implementation of the OCP Group strategy in the field of soil and plant fertilization solutions.