Belgian fertilizer producer Rosier SA plans to seek investor approval on March 14 for a debt-for-equity swap aimed at raising €55 million (approximately $62.8 million at current exchange rates) from its majority shareholder Vienna-based Borealis AG after its assets fell to less than a quarter of its statutory share capital, according to a Feb. 9 statement by the company.
The EGM proposal is for the issue of 2.75 million new shares at €20 each, boosting Borealis’ equity stake in the company to around 98 percent, from the current around 77.8 percent.
The valuation follows an assessment by KBC Securities that saw Rosier’s equity value as negative, and compares with a €62 market price when trading in shares was suspended on Jan. 18, according to a Bloomberg report. The proposed issue price represents about a 67.7 percent discount to the last closing price before the suspension of trading.
The Moustier, Belgium-based fertilizer producer is also to receive an up to €15 million unsecured financing facility from Borealis.
According to the statement, Rosier’s Board of Directors expects the new committed facility to cover Rosier’s needs up to March 14, 2023, while the proposal to increase Rosier’s capital will reinforce the solvency of the company and would allow Rosier to find alternative sources of financing.
However, the Board conceded given that the new committed facility is expected to cover the company’s needs only up to March 14, 2023, it believes “there is a material uncertainty which may cast doubt on the company’s ability to continue as a going concern” after that date. However, they said they have “reasonable expectations” that Rosier will have adequate resources to continue in operational existence for the foreseeable future and at least until March 14, 2023.
The company said it intends to assess “strategic options” for its 100 percent-owned Netherlands subsidiary, Rosier Nederland BV, with its operations in Sas van Gent, in the near future, according to the company statement. The options include a divestment of Rosier Nederland from the Rosier Group.
Rosier SA reported an unaudited FY2021 net loss of -€36.9 million (FY2020: -€25.6 million). FY2021 EBITDA was -€4.9 million (FY2020: €1.1 million) on sales of €233.8 million (FY2020:€202.6 million). Sales volumes decreased by 6 percent compared with 2020, and margins decreased with 29 percent
Among the key challenges faced by the company last year were steep hikes in most basic raw materials prices, especially the ones produced from natural gas – “some as much as 50 percent,” it said.
Rosier SA is not part of Borealis’ parent company, Austrian oil and gas company, OMV AG’s plans to sell Borealis’ fertilizer business, according to OMV’s FY 2021 annual report statement, published last week.
Borealis/OMV announced last week they had received a binding offer from EuroChem Group AG, Zug, Switzerland, for the acquisition of Borealis’ nitrogen business, including fertilizer, melamine and technical nitrogen products (GM Feb. 4, p.1). The parties have begun exclusive negotiations for the acquisition.
The EuroChem offer values the Borealis nitrogen business on an enterprise value basis at €455 million (approximately $514 million at current exchange rates).