Australia's Neurizer inks $1 bln supply deal with S.Korean conglomerate (updated)

Neurizer

04/07/2022 01:16

(Updates with details, background)
    July 4 (Reuters) - Australian urea producer Neurizer Ltd
 NRZ.AX  said on Monday it signed a A$1.5 billion ($1.0 billion)
deal with a unit of South Korean conglomerate DL Holdings
 000210.KS  to supply 500,000 tonnes of granular urea per year.
    Neurizer, which develops inputs for food production, said
the take or pay agreement with Daelim Co Ltd is for an initial
five-year term with an option to extend by mutual agreement.
    The agreement guarantees 50% offtake of Neurizer Urea
Project's initial yearly production by Daelim, and secures
significant revenue which will be used to finance the project in
South Australia, the company said. (https://bit.ly/3R53IHj)
    Neurizer also said the contract value was based on forecast
prices by commodities consultancy firm CRU Group, and at current
prices, the contract would be worth more than A$2.8 billion. 
    The offtake agreement, first announced in November last
year, comes shortly after DL Holdings' construction unit DL E&C
Co Ltd took a 9.1% stake in Neurizer last month.  urn:newsml:reuters.com:*:nL4N2YA0JZ
    Shares of Neurizer soared 33.3% to A$0.24 in early trading
on Monday. 
    
($1 = 1.4656 Australian dollars)

 (Reporting by Himanshi Akhand in Bengaluru; Editing by Tom
Hogue and Uttaresh.V)
 ((Himanshi.Akhand@thomsonreuters.com;))