16/09/2008 - 15:44

Yara spends $US141m on Burrup stake

16/09/2008 - 15:44

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Norwegian fertiliser company Yara International ASA has lifted its stake in Burrup Holdings to 35 per cent after purchasing additional equity from the company's founder and chairman Pankaj Oswal.


Norwegian fertiliser company Yara International ASA has lifted its stake in Burrup Holdings to 35 per cent after purchasing additional equity from the company's founder and chairman Pankaj Oswal.

Yara has agreed to pay US$141 million (A$176 million) to Mr Oswal to lift its stake from 30 per cent to 35 per cent.

Mr Oswal owns the remaining 65 per cent of the company, which developed the Burrup Fertilisers ammonia plant on the Burrup Peninsula in 2005.

The transaction follows Burrup Holdings' scrapping of its initial public offering earlier this year, due to the downturn in global stock markets and the temporary loss of the company's gas supply after the Varanus Island gas explosion.

Burrup's original IPO sought to sell 20 per cent of company to raise between $500 million and $600 million.

Yara acquired its original 30 per cent stake in Burrup in 2005, in a transaction believed to be valued at about US$100 million.

That transaction included Yara acquiring the marketing rights for Burrup's ammonia.

Burrup is understood to be evaluating the best timing for relaunching its IPO.

In a statement, Yara said today's purchase increases its position in a low-cost gas area.

"It also strengthens Yara's contractual rights to downstream upgrading and marketing from BHL in an interesting market for both our industrial and fertilizer products", says Thorleif Enger, President and CEO of Yara International ASA.

Mr Oswal said the purchase price by Yara "illustrates the leading position that BHL holds in the global ammonia market and the value of the growth opportunities being executed by the company".

"This transaction provides a benchmark for the floor price and underpins the IPO valuation of the company", said Mr Oswal.

Burrup Holdings owns and operates an ammonia plant located on the Burrup Peninsula with an annual production capacity of approximately 850,000 tones of liquid ammonia.

Yara and Burrup are also continuing to progress the development of a 350,000 tonnes per year ammonium nitrate project adjacent to the existing ammonia plant.

 

 

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