Brazil’s Fertilizantes Heringer SA has sold its Uberaba blending plant in Minas Gerais state to the Brazilian fertilizer distributor Cibrafértil Group for R$55 million (approximately US$10.25 million at current exchange rates), according to an Heringer statement. The money will be paid in three annual installments.
The Cibrafértil Group is majority owned by U.S.-based Omimex Resources Inc. with Anglo American holding a 30 percent interest.
The Uberaba plant, with production capacity of 400,000 mt/y, was believed to have been idled by Heringer back in 2019 (GM April 19, 2019).
The acquisition of the plant will increase Cibrafértil’s Brazilian production capacity by 24 percent, according to a Nasdaq report, citing a company statement. The purchase is part of Cibrafértil’s R$400 million expansion plan that aims to reach local production capacity of 2.5 million mt by 2025.
According to the Heringer statement, the Uberaba assets were offered as a guarantee for a revolving credit facility executed in Sept. 2018, for the purchase of agricultural supplies from Agro Industrial São Luiz Ltda., a company belonging to the Cibrafértil Group and CMOC Brasil Mineração, Indústria e Participações Ltda.
Accordingly, the credit held was considered non-bankruptcy, and why the sale of the plant was not part of Heringer’s ongoing Judicial Recovery plan (GM Dec. 6, 2019).
The Cibrafértil Group has agreed to write off all liens on the Uberaba assets, Heringer said.
The deal remains subject to approval by Brazil’s Administrative Council for Economic Defense.