OCI NV, Amsterdam, on Oct. 7 announced the launch of an offering of $1.1 billion (equivalent) of Senior Secured Notes. They will be denominated in USD and EUR. The Notes will be senior secured obligations of the company and will be guaranteed by certain of the company’s subsidiaries. Interest will be payable semi-annually. The interest rate, offering price and principal amount of each series of the Notes along with certain other terms will be determined at the time of pricing of the offering, subject to market conditions.
The net proceeds of the offering will be used to repay certain existing indebtedness of the group and pay related fees and expenses. The refinancing aims to continue the company’s strategy of optimizing its capital structure which it launched in 2017, including refinancing debt at various subsidiaries and moving towards a robust financing structure at the holding company level, as the company says it has reached the end of its capex program and individual projects have reached or are on the verge of reaching full production.
In other news, OCI said that based on current information available to management, that total sales volumes for the two months ended Aug. 31, 2019 are in line with management expectations and increased by approximately 7 percent compared to the two year-ago months. However, the increases were mainly due to increased methanol and DEF production, with nitrogen fertilizer volumes down due to major turnarounds. Increases in sales volumes were primarily driven by (i) the ramp-up of new Natgasoline methanol capacity, which was fully reflected in July volumes; (ii) a doubling of DEF sales volumes; and (iii) the start-up of BioMCN’s second methanol line during the third quarter, as well reflecting full production from BioMCN’s first line, which was down for a planned turnaround during third-quarter 2018.
OCI believes nitrogen sales volumes were lower than could have otherwise been achieved (i) due to scheduled turnarounds at a number of its facilities (Iowa Fertilizer Co., Sorfert, EFC and OCI Nitrogen), which management planned to coincide with the usual seasonal demand slowdown, and (ii) an unplanned shutdown at Natgasoline starting in August due to an isolated event related to the waste heat boiler that is currently being resolved.