All Posts from September 15, 2015

Yara halts Finland project – Alert

Yara International ASA has made a preliminary decision to halt development of its Sokli mining project in Finland, due to the anticipated profitability of the project being below Yara’s requirement.

Before concluding, Yara will seek to finalize the process of obtaining environmental and mining permits and clarify other prerequisites for project execution. Yara may also re-evaluate the project in the future.

The book value of Yara’s Sokli investment is EUR 18.5 million.

Yara to sell European CO2 business – Alert

Yara International ASA has signed a non-binding Heads of Terms with U.S.-based Praxair Inc. to sell its European CO2 business for EUR 218 million. The agreement also includes a sale of Yara’s remaining 34 percent stake in the Yara Praxair Holding AS joint venture to Praxair for an estimated EUR 94 million.

"The CO2 business has been an attractive and long-standing part of Yara’s portfolio, but remains a relatively small part of the broader industrial gas industry, and where Praxair is well positioned to create additional value. I am confident that this business will be further strengthened under Praxair’s ownership, and at the same time this agreement allows Yara to re-deploy management and financial capacity to other value-creating opportunities" said Svein Tore Holsether, president and Chief Executive Officer of Yara International ASA.

The proposed transaction is conditional upon final transaction agreements, obtaining necessary approvals from competition authorities, and other customary closing conditions. The transaction is expected to close in the first quarter of 2016, with a provisionally estimated post-tax gain of EUR 150 million including the Yara Praxair Holding AS sale.

In 2014, Yara’s European CO2 business sold more than 850 thousand metric tons of liquid CO2 and 50 thousand metric tons of dry ice, delivering an EBITDA of EUR 21.5 million and revenues of EUR 112 million primarily from the food and beverage industry. The business operates 5 CO2 liquefaction plants, 3 CO2 ships, 7 ship terminals and 6 dry ice production facilities.

The Yara Praxair Holding AS joint venture, operating in Scandinavia and formed in 2007, had a 2014 EBITDA of EUR 35 million and revenues of EUR 145 million (100% basis). Yara’s exit from the joint venture is regulated through a put/call option in the joint venture agreement.

The Heads of Terms also includes an agreement for Yara to supply Praxair with raw CO2, gas and continue to operate three of the CO2 liquefaction units which are integrated within Yara’s fertilizer plants.

OCP eyes investors – Alert

State-owned Moroccan phosphate producer OCP SA is studying bringing in investors such as sovereign wealth funds as a prelude to an initial public offering within two to three years, according to Bloomberg, citing individuals familiar with the plan.
    
OCP CEO Mostafa Terrab said in an interview Sept. 15 in London that the state-owned company is ready to consider all possibilities and a share offering isn’t "taboo", although the government has the final say. He said the Moroccan state will always maintain majority control. "Other than that, we are open to all financing options that advance our strategy and protect our shareholders’ interest."
    
OCP, founded in 1920, is owned 95 percent by the government with the remainder held by local lender Banque Centrale Populaire, is in the middle of a $20 billion-plus expansion program to double mining output and triple fertilizer production. It has spent $4 billion on the 2008-2025 plan so far and is now deploying $2 billion more. The balance will be invested as demand increases, Terrab said.