#Netherlands #Amsterdam #OCI Global #OCI Nitrogen #AGROFERT

OCI Global Moves Ahead with Sale of OCI Nitrogen Stake

OCI Global, a prominent player in the nitrogen products sector, recently disclosed its plan to divest 50% of its equity interest in OCI Nitrogen to AGROFERT, a well-regarded manufacturer in the European nitrogen market. This strategic decision is seen as a pivotal move in the company's growth narrative and has far-reaching implications for stakeholders involved.

Details of the Transaction

The agreement involves the sale of shares in Nitrogen Intermediate Holding B.V., a holding company that owns OCI Nitrogen entirely. The sale is valued at roughly half of EUR 110 million, with adjustments based on customary net debt at the time of the transaction and associated costs. The completion of this initial transaction is anticipated by the second half of 2027 and is dependent upon gaining the necessary regulatory approvals and the consent of OCI N.V.'s shareholders in an extraordinary general meeting.

Once the deal is finalized, AGROFERT will take over the operational management of OCI Nitrogen, featuring majority representation on the board. Despite relinquishing control, OCI will retain a 50% financial interest in the entity, along with specific protections typical of joint ventures, ensuring that they remain a significant participant in the company's future.

Future Options

In addition to the initial sale, the agreement includes provisions for a put/call option concerning the remaining 50% stake. This option can be exercised by either party starting two years after the initial transaction closes, with the purchase price being contingent upon a multiple of the average pro forma adjusted EBITDA from the preceding two-year period.

The structure of this put/call option allows OCI to possibly reclaim full stakes in OCI Nitrogen should market conditions align favorably. For instance, the pricing framework for the option indicates a valuation based on a multiplier of 7 times the two-year average EBITDA prior to the exit, offering a strategic safety net.

Financial Performance Highlights

Over the last twelve months leading to April 2026, OCI Nitrogen generated an EBITDA of EUR 105 million, showcasing its strong performance, especially with a notable EUR 43 million coming from Q1 2026, a period that was characterized by a robust pricing environment for nitrogen products. However, this performance should be contextualized within the larger geopolitical tensions affecting market stability, as the actual run-rate might differ due to various non-recurring variables.

Contextual Financial Insights

It is also important to consider that during the phase leading up to the exercising of the put/call option, OCIN's net debt is projected to stand at roughly EUR 100 million. These estimates feed into the financial health assessment of OCI Nitrogen moving forward, forming the basis for future operational and investment decisions.

Strategic Significance

Hassan Badrawi, CEO of OCI Global, emphasized that this divestiture wasn't merely transactional but a strategic alignment following extensive discussions and negotiations. By partnering with AGROFERT, they believe they are placing OCI Nitrogen in capable hands that possess substantial expertise and an industrial footprint in the nitrogen sector across Europe. This collaboration is anticipated to secure long-term business continuity and foster development opportunities for employees and customers alike.

Conclusion

The strategic sale of OCI Nitrogen represents a significant chapter in OCI Global's operational strategy. By transitioning part of its stake to a reputable industry player, the company is poised to enhance its competitive positioning while maintaining a vested interest in the nitrogen market. Stakeholders will be keenly observing the completion of this transaction and its implications for future growth and collaboration between OCI Global and AGROFERT.