PotashCorp Announces Strategic Partnership with Sinochem Corporation's Fertilizer Business (Sinofert)

08-Jun-2005

Potash Corporation of Saskatchewan Inc. (PotashCorp) announced that it has reached agreement with a subsidiary of Sinochem Corporation (Sinochem) to purchase a 9.99 percent interest in Sinochem's fertilizer business (Sinofert). Sinochem had previously announced in January 2005 that it would reorganize and place its fertilizer business, with certain exceptions, into a publicly traded company which is currently listed on the Hong Kong Stock Exchange.

PotashCorp's investment is subject to the fulfillment of various conditions, including the completion of the reorganization and a securities offering, which is expected to occur in July 2005. Under the terms of the agreement, PotashCorp will also hold an option to purchase an additional 10.01 percent interest within the next three years. The cost of the initial investment is not yet determinable, as it is based on the institutional bookbuild price in the forthcoming private placing, subject to a cap. The price for the shares subject to the option will be determined by the prevailing market price at the time of exercise. The investment is subject to customary conditions to completion.

Sinofert, a key Canpotex customer, is the largest importer of fertilizer products in the People's Republic of China (PRC) in terms of import volume and the largest integrated distributor of fertilizer products in terms of sales volume in the PRC. In serving China's rapidly expanding market, Sinofert relies heavily on potash imports from Canpotex due to limited indigenous resources. A substantial portion of its sales volumes, revenues and gross margin are from potash sales.

https://www.chemeurope.com/en/news/46650/potashcorp-announces-strategic-partnership-with-sinochem-corporation-s-fertilizer-business-sinofert.html