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Itafos Inc V.IFOS

Alternate Symbol(s):  MBCF

Itafos Inc. is a phosphate and specialty fertilizer company. Its businesses and projects include Conda, Arraias, Farim, Santana and Araxa. Conda is a vertically integrated phosphate fertilizer business located in Idaho, United States with a production capacity of over 550 Kiloton (kt) per year of mono ammonium phosphate (MAP), merchant grade phosphoric acid (MGA) and ammonium polyphosphate (APP), and approximately 27kt per year of hydrofluorosilicic acid (HFSA). Arraias is a vertically integrated phosphate fertilizer business located in Tocantins, Brazil with a production capacity of approximately 500kt per year of single superphosphate (SSP) and SSP with micronutrients (SSP+). Farim is a phosphate mine project located in Farim, Guinea-Bissau. Santana is a vertically integrated high-grade phosphate mine and fertilizer plant project located in Para, Brazil. Araxa is a vertically integrated rare earth element and niobium mine and extraction plant project located in Minas Gerais, Brazil.


TSXV:IFOS - Post by User

Bullboard Posts
Comment by Psalm9012on Dec 31, 2015 4:20pm
198 Views
Post# 24422967

RE:Brent de Jong and his connections

RE:Brent de Jong and his connectionsAt the same time that the plunging Brazilian Real (dropped in half relative to the U.S.$ in the last 3 years alone) will make the Itafos operation more lucrative, it doubles MBACs debt (which is in U.S.$) in Real terms making it prohibitively more expensive for a partnership or buyout internally without major concessions that would likely have to be made by the shareholders. In fact, with the exception of a buyer in the U.S., MBACs debt has become increasingly burdensome for anyone to partner with or buyout the company. That is one reason I cant see them coming out with a very good deal but they may try to keep shareholders favour by showing there is a future if they have offtakes for most of their production. After all, what have they been doing for a full year other than fighting their own employees in court (which should never have had happened in the first place). However, that is unlikely to stave off a hostile bid from a U.S. company, like Mosaic, to whom the assets are becoming increasingly attractive. Why hasnt a hostile takeover happened yet? - one reason only the unknown liability of the employee lawsuits. Recall, the second round of bids were to be binding but none were as they became aware of the lawsuits. In MBACs Jun 15 press release they identified employees demands for damages that were several times the standard severance. Potential bidders likely came to realize they would be dealing with some rural small town Brazilian judge that sees dollar signs in these assets and has the power to prevent the plant from operating until such time all his demands are met. The last press release pretty well confirms this when it says, The proceeds of the new advances under the bridge loans are to be used to settle outstanding labour claims. I still cant figure out if this management was that incompetent to let this happen in the first place or it was cleverly planned. Nonetheless, once the deal is announced we should have about a month or so for a hostile bidder to come in here. It will take about 3 months to close the deal and another 3 months to get the plant back up and running (especially if motors and copper wire were stolen) and I fear if this thing drags on much longer we could lose yet another production season and the future could be very grim. IMO. Greg
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