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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
Post by Psalm9012on Jan 11, 2016 12:46pm
332 Views
Post# 24446709

Poor Deal - Better Odds Outside Bid

Poor Deal - Better Odds Outside BidI think we can all agree a deal is imminent. The big question is whats in it for shareholders. The stock price would suggest almost nothing, however, this may more so reflect the pathetic performance of this management team to date as opposed to the actual deal itself. Its been suggested that there has to be something for shareholders as we have to vote on it but they could offer little and threaten its this or bankruptcy to force us to take almost anything. However, I think their greater fear is knowing that the worse the deal to shareholders, the greater the likelihood of an outside offer coming in. The name Mosaic, the worlds largest phosphate fertilizer producer, has been mentioned many times and I think its worthwhile reviewing why they are a likely candidate. It was just under 2 years ago (April 2014) that the company bought out Archer Daniels fertilizer distribution network in Brazil and also said they would be expanding their port terminal. Then, just 1 year ago (Feb 2015), the CEO, Prokopanko, said the company was interested in buying some Brazilian phosphate producers. According to Mosaics website, they have 19 facilities in Brazil, less offices and the port, it consists of 14 warehousing and blending facilities and just 2 production facilities both SSP and in the south. Notice the strategy shift from 2014 to 2015 from expanding the port to pursuing internal production with the currency dropping about 25% relative to the U.S. dollar. Well, in 2015, the currency dropped another 50%. You can bet they have dropped their intentions to expand their port to bring in more fertilizer imports to actively pursuing internal production. Up to 2014, also half of Mosaics North American phosphate fertilizer production was exported but with the strong U.S.$ this will be clearly dropping off and the money will have to be made through internal production to those countries they once exported to. They further recognize this is where the money is to be made when they state in their Nov 2015 presentation that, the local currency price of soybeans (was) at a record high. MBACs assets are significantly more valuable today than just 1 year ago due to the currency differentials. This cant go unnoticed by international fertilizer producers. IMHO. Greg
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