Romania’s state-controlled natural gas group Romgaz (BVB: SNG) announced that it signed on May 28 the contract to take over from Swiss Ameropa the productive assets of the country’s largest and sole functional fertilisers producer, Azomureş, for EUR 46.5 million plus corrections that may bring the final price to EUR 69 million. 

The price, which has been negotiated for months, is inferior to the EUR 200 mln reportedly requested by Ameropa and even lower than the EUR 100 million that the buyer offered initially, according to unconfirmed reports.

The deal will secure steady flows of fertilisers to local farmers, at predictable prices, interim prime minister Ilie Bolojan announced in a Facebook post. The industrial facility has operated temporarily and at a fraction of its capacity over the past few years, amid scarce and costly gas supplies.

The deal includes, however, only the assets directly related to the core activity of the company. Romgaz will keep only the employees necessary for the functioning of the core assets, according to the note published by the company. 

The assets to be taken over include, according to the current report published on the BVB, "tangible and intangible assets, rights, authorisations, relevant commercial contracts, employees and inventories related to the production activity of the plant." The contract also provides for protection mechanisms - guarantees, compensation mechanisms, and escrow arrangements, within the limits stipulated in the contract.

As part of the deal, up to EUR 10 million will be paid for the raw materials and consumable stocks currently in the plant, and a maximum of EUR 13 million will be paid to keep the plant in operation and pay employees in the next two months, until the actual takeover.

The actual transfer of the assets depends on the approval of Romgaz shareholders, the Competition Council, and the Foreign Investment Commission.

Azomureș has faced repeated production interruptions in recent years amid volatile natural gas prices, which significantly affected the competitiveness of fertiliser manufacturing in Europe. The plant is one of Romania’s largest industrial consumers of natural gas and has long been considered strategically important for the domestic agricultural sector.

iulian@romania-insider.com

(Photo source: Facebook/Azomures)