Representatives of Ina and PPD assessed on Friday that the Turkish Yildirim is a good strategic partner for Kutina’s Petrokemija, estimating that it will take about six months to complete the transaction through which the Turkish group will acquire a majority stake in the Kutina fertilizer plant.
Ina and PPD signed a contract on Thursday evening with representatives of Turkish Yildirim for the sale of the company Terra Mineral Fertilizers, which holds a 54.52 percent stake in Kutina’s Petrokemija.
– Neither Ina nor PPD are from the artificial fertilizers industry. We entered Petrokemija in 2018 with the intention of stabilizing and restructuring it, and we believe that has been accomplished. For the long-term path of Petrokemija, it is probably best to have an owner from that industry, and the Yildirim group is that – stated Hrvoje Glavaš, Director of Strategic Business and Public Affairs at Ina, to reporters on Friday.
PPD Management Board member Antonija Glavaš also believes that for the long-term path of Petrokemija, it is best to have an owner from that industry.
– Yildirim is certainly a serious company that has due diligence conducted for almost two years, which shows their seriousness and intention to likely invest further in Petrokemija, to keep it stable and to ensure it continues to operate in the long term – said the PPD Management Board member.
Representatives of Ina and PPD could not comment on the value of the transaction, noting that it is confidential information. They estimate that it will take about half a year, maybe a little longer, to complete the transaction.
On Thursday, they stated in a press release that the change of ownership and completion of the process will occur after the conditions from the purchase agreement are met. One of those conditions, as they said today, is the transfer of the state contract with the company Terra Mineral Fertilizers.
When asked whether the state’s obligations from the contract with Terra Mineral Fertilizers remain, Hrvoje Glavaš replied that they are one of the conditions that must be met for the completion of the transaction.
– One of the conditions is also the transfer of that contract to the new owner – he said.
In addition, some regulatory conditions must also be met, for example, related to market competition protection, and approvals from regulatory bodies in the countries where both Petrokemija and Yildirim operate are required.
– We estimate that this process from signing to completion of the transaction could take about half a year or a little longer – said Hrvoje Glavaš.
By the way, Terra Mineral Fertilizers is a partnership owned by PPD and Ina that entered the ownership structure of Petrokemija on October 31, 2018. At that time, a recapitalization of Petrokemija was carried out in the amount of 300 million kuna, with both companies contributing 150 million kuna each. Representatives of Ina and PPD emphasize that since then, the Kutina plant has made a number of positive strides.
– The signing of the contract (with Yildirim) for Ina and PPD means the completion of a process we started in 2018 when we entered the ownership structure. In these four years, the company has made a significant number of positive strides – it has been thoroughly restructured, and its market position has been strengthened – said Glavaš, adding that 2019 and 2020 were the two best financial years in the history of Petrokemija.
He also pointed out that today the entire global artificial fertilizers industry is facing significant challenges, primarily arising from rising energy prices and CO2 quotas.
– For this reason, we believe that the best way for Petrokemija’s long-term sustainability is to find a strategic partner from that industry, and we believe we have found that in the Yildirim group – he reiterated.
Petrokemija has halted production this year due to high gas prices, and representatives of Ina and PPD note that it is difficult to predict when production might resume.
– The start of production primarily depends on market conditions, which define whether production is profitable or not. In this case, it is actually the gas prices. Unfortunately, it is difficult to predict when those conditions will again be such that production would be profitable – said Glavaš.
In response to repeated inquiries from journalists, he stated that they do not have explicit guarantees from the new owner regarding the resumption of production.
– We do not have a guarantee as a guarantee. But what we consider from our experience, from discussions with them and the commercial conditions they offered, which we cannot discuss, we believe they are a serious strategic investor who will continue production in Petrokemija – he emphasized.
Antonija Glavaš points out that PPD has always been interested in Petrokemija operating, as they are primarily a gas trader.
Hrvoje Glavaš, when asked about workers and job security, referred to the new owner, adding that he believes ‘the future of Petrokemija is still bright’. He also referred to the new owner regarding questions about speculation that the investor wanted to buy a 100 percent stake in Petrokemija.
In addition to Terra Mineral Fertilizers, which holds a 54.52 percent stake in Petrokemija, the ownership of the Kutina mineral fertilizers plant also includes the state, which holds 17.9 percent through the Center for Restructuring and Sale (CERP), 12.73 percent of shares are held by the HPB custodial account on behalf of the Fund for Financing the Decommissioning of the Krško Nuclear Power Plant, 9.09 percent by Janaf, and 5.45 percent is on the PBZ custodial account. Petrokemija itself owns 0.08 percent of the shares, while the remaining shares are owned by small shareholders.
Prime Minister Andrej Plenković stated today that the Government will see whether it will retain its stake in Kutina’s Petrokemija.
– We will see. The state has 17.9 percent here and there are a few other co-owners. When the talks open, we will make decisions – said the Prime Minister in response to a journalist’s question about whether the state will retain its ownership package, as the Turkish investor has expressed a desire to purchase the entire Petrokemija.
