Yara International ASA reports that it has decided to write down the value of its Lifeco investment by US$112 million, leaving a remaining book value of $18 million.
Yara cited the worsening security outlook in Libya. Yara sees a high likelihood of a further deterioration in 2015 of the operating ability of the Lifeco joint venture plants. Yara said the jv’s feedstock and financial situation was already challenging.
Yara noted that the political and security situation in Libya has worsened rapidly, and may deteriorate further over the next year. In light of this, Yara is evaluating the operation of the plants on an ongoing basis in cooperation with the other partners, in order to protect the employees as well as the assets.
Yara said it will continue participating in the governance of Lifeco, with the aim of resuming full production once real improvements are seen in the security and political situation in Libya, creating a sustainable improved operating outlook for Lifeco.
The impairment will be reported as part of Yara’s first-quarter EBIT and EBITDA, under "Share of net income in equity-accounted investees."