OCI Global has retained advisors as part of its strategic review to explore potential asset monetizations, CEO Ahmed El-Hoshy said today.
The aim of the asset sale exploration is to bridge the gap between the combined value of the individual assets in the company’s portfolio and the discount on holding company shares, El-Hoshy said.
The decision to pursue the asset sales came after “constructive dialog” with Inclusive Capital, he said, an activist shareholder that has been pushing for the dispositions.
OCI CFO Hassan Badrawi added that he expected to provide an additional update before the end of the year, and that there was “strong interest in the active discussions.”
In the meantime, OCI is exploring adding a second line at its Texas blue ammonia project, a 1.1 mtpa facility under construction in Beaumont, Texas.
“We’re currently in advanced discussions regarding long-term offtake and potential equity participation, reflecting strong commercial interest and an increasing appetite from strategics to pay a premium to secure long-term low-carbon ammonia, given regulatory scores,” El-Hoshy said.
Any further expansion at the site will benefit from enhanced project economics, with cost benefits deriving from an early-mover advantage, as well as the ability to leverage existing infrastructure and utilities, El-Hoshy added.
“With this in mind – and against the backdrop of a positively evolving regulatory environment – we are prudently evaluating a second line at the site to capitalize upon anticipated demand,” he said, noting that the expansion would bring its clean fuels capacity in total to 2.8 million tons.
“With the incentives that are being provided for the utility space and the power space in Japan and Korea, there is, for many of the offtakers, a requirement to have an equity participation in the low-carbon ammonia,” El-Hoshy said.
The strategic investors could come with lower return requirements, allowing for a higher premium for the transfer of equity in the project, he said.
