OCI to sell IFCO stake to Koch Ag & Energy Solutions for $3.6 bln, shares jump (updated)

OCI

18/12/2023 15:33

(Recasts, adds detail in paragraph 2 and 3, updates shares)
       Dec 18 (Reuters) - OCI's  OCI.AS  shares jumped by
almost a quarter on Monday after the Netherlands-based chemicals
maker announced its second stake sale in four days and said the
pair of deals would bring it $7.2 billion in tax-free cash
proceeds.
    OCI said on Monday it had agreed to sell its stake in Iowa
Fertilizer Company (IFCO) to Koch Ag & Energy Solutions for $3.6
billion as part of a strategic review launched earlier this
year.
    The proceeds from the deal, which is expected to close in
2024, will be used to significantly reduce debt, OCI said.
    The company's net debt stood at $2.3 billion at Sept. 30.
    "A return of capital to shareholders will be considered
within the context of OCI's capital returns framework," it
added.
    The Dutch-listed company's shares were the biggest gainers
on the pan-European STOXX index  .STOXX , still up 21% at 24.56
euros at 1511 GMT.
    On Friday OCI announced the sale of its 50% stake in ammonia
and urea producer Fertiglobe to Abu Dhabi National Oil Company
for $3.62 billion.
    OCI has been selling assets as it seeks to reduce debt,
unlock more cash for shareholders and focus on greener chemicals
such as lower-carbon ammonia and green methanol.
    "This, in combination with the divestment of its Fertiglobe
stake implies OCI will be meaningfully net cash, with 
significant  potential  to  both  return  cash  to  shareholders
 and fund decarbonisation projects," Jefferies analysts said in
a note.
    ING analysts noted that after the two "transformative"
disposal deals, the company nonetheless retains some nitrogen
assets in Europe and methanol assets in Europe and the United
States, with increasing exposure to the energy transition.
    Morgan Stanley is acting as financial advisor to OCI on the
IFCO deal while Cleary Gottlieb Steen & Hamilton is legal
adviser.

 (Reporting by Olivier Sorgho, additional reporting by Diana
Mandiá
Editing by David Goodman, Kirsten Donovan)
 ((Olivier.Sorgho@thomsonreuters.com;))