Canada’s Agrium is to sell its stake in the EAgrium ammonia and urea plant in Egypt to state-owned Misr Oil Processing Company (Mopco), in return for shares in Mopco.
Under the deal, EAgrium will become a wholly-owned subsidiary of Mopco, while Agrium will take a 26 per cent stake in Mopco. The deal is due to be completed by the end of the third quarter of 2008.
Mopco already owns a 675,000 tonne-a-year urea plant, which is due to come on line in the fourth quarter of 2008, and plans to build two more urea trains.
Agrium’s share of Mopco’s urea production will be 175,000 tonnes a year until 2011, when the two new trains will be completed. After this its share will rise to 525,000 tonnes a year.
Agrium says its stake in Mopco should start to produce a profit in the fourth quarter of 2008.
Mopco will arrange the $1.1bn project financing needed to cover the cost of future projects and Agrium will not be required to contribute any additional equity to the project beyond the $280m it committed to EAgrium this year (MEED 8:8:08).
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