Hungarian fertilizer maker Nitrogenmuvek Zrt. plans to import ammonia instead of producing it at its plant in Hungary, avoiding the country’s extra taxes on carbon emissions, CEO Laszlo Bige told local broadcaster ATV, as reported by Bloomberg.
Nitrogenmuvek is looking at restarting the ammonia plant next June after reorganizing its production. Importing ammonia would allow the company to produce its downstream products. In recent weeks, the company initially announced plans for an indefinite shutdown, but later downplayed that possibility (GM Nov. 17, p. 29).
Nitrogenmuvek is seeking ways to refinance its bonds early next year while making efforts to restart production, said Chief Strategy Officer Zoltan Bige on Nov 29.
The company, one of the largest European producers of nitrate-type fertilizers, has €200 million ($218 million) in bonds maturing in May 2025. The company wants to create a “liquidity buffer” well in advance and go to the market in the first quarter or the early second quarter of 2024, Bige said.
Nitrogenmuvek would prefer to issue bonds again, with other options such as bank debt, also considered. “We would like to keep our sources of external financing around the current levels,” Bige said.
While ammonia and fertilizer production are both suspended, the company is seeking ways to restart fertilizer output as soon as possible and continue normal operations in the longer run, he said.
Nitrogenmuvek’s bonds are rarely traded, but brokers are quoting them at about 60 cents on the euro, down from about 80 cents earlier this month before the production halt. The company cited a Hungarian tax, levied on carbon emission quotas that are allocated for free, for the stoppage, which came after a previous suspension during the spike in natural gas prices.
“The fundamentals remain strong and if not for the tax, we would not have needed to shut down,” he said, adding that the company has sufficient funds for upcoming coupon payments. Diversifying further into hydrogen production is another key plan to boost revenue, he said.