TORONTO: Agrium Inc said on Monday Misr Oil Processing Company, S.A.E. of Egypt (MOPCO), will acquire its EAgrium project through a share swap in which EAgrium will become a wholly-owned subsidiary of MOPCO and the shareholders of EAgrium will become shareholders in MOPCO.
Agrium said it will own a 26 percent interest in the combined entity and it anticipates earnings contributions beginning in the fourth quarter of 2008.
The agreement is subject to a number of conditions which are expected to be concluded prior to the end of the third quarter.
Calgary-based Agrium said its share of annual production would be 175,000 tons of urea. Once expansion of the Egyptian site is complete in 2011, its share of annual output would increase to around 525,000 tons annually.
Agrium said MOPCO will arrange a proposed project financing facility of about $1.1 billion after completion of the share swap which is required to finance all future project costs.
Under the current financing plan, Agrium would not be required to put any further equity into the project beyond the approximately $280 million of equity already committed to the EAgrium project.
The Egyptian government last week canceled a planned $1.4 billion Agrium fertilizer plant and said that MOPCO would acquire the shares of Agrium’s Egyptian subsidiary.-Reuters
