This is a massive IPO coming to market - any one would like to add to this IPO future with strong food demand, high fertiliser value .....
Commsec is the lead manager+
Some extract from Commsec
Burrup is presently 70% owned by the Burrup Trust and 30% owned by Yara. The offer of shares in Burrup is for approximately 223.1 million Shares at an Indicative Price Range of $1.75 - $2.25 per Share. Immediately after completion of the Offer, Burrup will be 53% owned by the Burrup Trust, 27% owned by Yara and 20% owned by new shareholders.
Key Features of the Offer (extract from Commsec Site)
One of the world’s largest producing single train merchant ammonia plants
Australia’s only merchant ammonia plant (I do not think that could be a great competitive advantage for 20 million population base, with high Oz dollar and production cost for export)
20 year take-or-pay agreement for 100% of ammonia production with Yara
High barriers to entry
Attractive ammonia market fundamentals - with phosphate hype this could be an important part
Key input into fertiliser products which are experiencing strong price growth
Strong demand side fundamentals expected to drive increased fertiliser use and provide support to ammonia prices
Recent Middle East spot ammonia price of around US$500 per tonne
Long term gas supply agreement
25 year (plus 5 year option) GSPA with Harriet JV (Apache Corporation is operator)
(Burrup Holdings, through its wholly owned subsidiary Burrup Fertilisers, commenced ammonia production in April 2006 with its stand-alone, 2,200 tonnes per day nameplate capacity Ammonia Plant. The Burrup Holdings Ammonia Plant is one of the world’s largest producing single train merchant ammonia plants, representing c. 4% of world production and c. 30% of Asia Pacifi c production
of tradable ammonia. Burrup Holdings is one of the lowest cost ammonia producers globally.
Under the current pricing mechanism, the maximum gas price in the final year will not exceed US$1.60 per GJ
The only issue could be the whole proceed of IPO will primarily go to buy 357 million shares from Oswal Family and nothing will be put back to enhance the asset - any comments here >