All Posts from November 3, 2016

LSB eyes strategic alternatives

LSB Industries Inc., Oklahoma City, said Nov. 3 that its board of directors has initiated a process to explore and evaluate potential strategic alternatives for the company, which may include a sale of the company, a merger with another party, or another strategic transaction involving some or all of the assets of the company.

LSB has retained Morgan Stanley & Co. LLC as its financial advisor to assist with the strategic review process.

The company stated that there can be no assurance that this strategic review process will result in a transaction. LSB has not set a timetable for completion of the review process, and it does not intend to comment further regarding the strategic review process unless a specific transaction is approved by its board of directors and signed, the strategic review process is concluded, or it is otherwise determined that further disclosure is appropriate or required by law.

Agrium, PotashCorp shareholders approve merger

Agrium Inc. and Potash Corp. of Saskatchewan Inc. shareholders today voted in favor of the merger of equals. Some 98 percent of Agrium shareholders voted for the merger. Only two-thirds were required. PotashCorp shareholders approved the deal by 99 percent.

DOC imposes AS dumping duties

The U.S. Department of Commerce has now imposed antidumping duties on imports of ammonium sulfate from China. These findings are the result of petitions filed by PCI Nitrogen in May alleging that imports from China were both being subsidized and dumped at below fair value and were causing material injury to the U.S. ammonium sulfate industry.

DOC has now released its preliminary determination in the antidumping investigation, finding that imports of ammonium sulfate from China were dumped at margins of 493.46 percent percent ad valorem. As a result, DOC will instruct U.S. Customs and Border Protection to begin collecting cash deposits or bonds on imports of ammonium sulfate from China equal to the preliminary dumping margins.

The antidumping duties will be imposed in addition to the countervailing (CVD) duties of 206.72 percent ad valorem. The CVD duties became effective Nov. 2 and were the result of DOC’s Oct. 24 preliminary determination that imports from China were also being heavily subsidized (GM Oct. 28, p. 11).

Commerce is due to issue its final determinations in the antidumping and countervailing duty investigations in mid-January 2017, which will be followed by the U.S. International Trade Commission’s final phase investigation assessing the material injury caused to the U.S. ammonium sulfate industry.

Gas leak at fertilizer plant kills four in India

A gas leak at the Gujarat Narmada Valley Fertilizer Co. (GNFC) plant in Dahej on Nov. 3 killed four workers and injured 14 others.

Government and company officials gave no official cause for the leak, which occurred at the toluene disocyanate (TDI) gas operation in the GNFC complex. However, local media reported that a faulty gasket lead to the leak. The same plant had a similar accident in January 2014, leaving 15 workers seriously ill.

The plant was shut down and will remain offline for an undetermined time. Local and national government agencies have initiated investigations into the accident.

Agrium posts 3Q loss; merger votes today

Agrium Inc. reported a third-quarter net loss attributable to equity holders of $41-million ($0.29 diluted loss per share) compared to year-ago net earnings of $101-million ($0.72 per share). The company said the reduction was driven by lower year-over-year nutrient pricing, low pest and disease pressure in the U.S. which limited the demand for crop protection products and application services this growing season, a delayed harvest across North America related to wet weather, and one-time costs primarily related to the proposed merger with PotashCorp.

Net sales were off 11 percent to $2.24 billion from the year-ago $2.52 billion.

“Agrium continues to focus on what we can control during these times of market weakness,” said Chuck Magro, Agrium president and CEO. “I am particularly pleased with the results of our operational excellence initiatives. Our focus on growing our Retail business continues, with 70 locations acquired year-to-date, representing approximately $500-million of expected incremental annual sales. Looking out for the rest of the year, we expect solid demand for crop nutrients; however, growers have experienced poor fall weather in Canada and pockets of the U.S. which has impacted harvest progress and ammonia applications.”

“Our proposed merger with PotashCorp is a transformational opportunity to create a world class integrated global supplier of crop inputs and services,” he added. “This merger creates benefits and opportunities that neither company could achieve on its own and will unlock significant value for shareholders of both companies. By generating meaningful synergies, and producing significant combined cash flows, the new company will be positioned for further growth, while benefiting customers, suppliers, shareholders, communities and other stakeholders.”

Both Agrium and PotashCorp shareholders will be voting on the merger Nov. 3.