One of the region’s industrial giants in the region, Industries Qatar (IQ) has agreed to acquire a 25 percent stake in Qatar Fertiliser Company (QAFCO) which was previously held by Qatar Petroleum.
The firm will now convene an Extraordinary General Assembly (EGA) meeting to obtain the shareholders’ approval of the transaction. The date and timing of the EGA meeting will be announced in due course
The transaction estimated at $1 billion will have an effective date of January 1, 2020, until the expiry of the new Gas Sale and Purchase Agreement (GSPA).
This transaction specifically enhances the shareholder value by transforming IQ into a 100 percent owner of the world’s largest single-site urea producer and expanding its footprints in a well-established fertilizer business, with a proven track record of operational excellence and market positioning, along with resilient cash flow generation capabilities, spurred by synergistic opportunities.
As part of the transaction, QAFCO has entered into a new GSPA with Qatar Petroleum with effect from August 1, 2020, until December 31, 2035, covering the gas requirements of QAFCO trains 1-6 and Qatar Melamine Company (QMC).
In addition, and as part of the same transaction, IQ’s board of directors also approved QAFCO’s acquisition of Qatar Petroleum’s 40 percent stake in QMC, effective from July 1, 2020.
Being the sole shareholder of QAFCO, IQ will now have full control of QAFCO, which would provide IQ the ability to appoint all members of QAFCO’s board of directors, and make investing, financing and dividend decisions, independently, where, QAFCO’s board will ensure the strategic alignment and oversee further creation of value for QAFCO and its sole shareholder.