Selamat datang! Asian SOE seeks to spoil Incitec’s fertiliser spin-off

afr.com:

There’s nothing like a struggling demerger on the home front to pique the interest of a cashed-up offshore investor.

And that’s precisely what’s happening at Incitec Pivot, the $5.4 billion ASX-listed group that is attempting – amid growing investor scepticism – to split its fertiliser and explosive divisions.

Sources told Street Talk this week at least one Asian state-owned enterprise had eyes on Incitec’s troubled fertiliser business and had made an approach. Last month, Christine Corbett left her role as chief executive designate of the division in another sign that Incitec’s proposed split could be falling apart. Jeanne Johns, the company’s chief executive who helped drive the demerger strategy, is also gone.

Incitec Pivot’s chief executive Jeanne Johns left the business on June 30. Chris Hopkins

Working on the demerger for Incitec has been Macquarie and UBS. But issues with contracting gas, leaving the company exposed to a huge price rise and shareholders railing at Incitec’s board, has created significant problems for the fertiliser division. Incitec expected to spend up to $90 million extra on gas this year, it said in June.

While it remains unclear who the prospective suitor for Incitec’s fertiliser business is, sources pointed to Pupuk Indonesia, one of the largest fertiliser producers in Asia thanks to significant support from the government.

A spokesperson for Incitec declined to comment.

One question which has been resolved is the fate of the Waggaman ammonia plant, which Incitec said in March would be sold to CF Industries Holdings for $US1.7 billion ($2.5 billion). The Louisiana plant was a bone of contention in the demerger plan over questions from investors about whether it would be a good for the