Heringer deal with Russian firms collapses

Brazil's fertilizer producer Heringer failed to close a deal with Uralkali and Uralchem regarding the sale of a controlling share to both Russian firms, ending more than three months of negotiations.

The collapse of the negotiations in late December came only a few days after Brazil´s antitrust regulator cleared the sale. That was a required step for the closing of the deal after creditors had accepted the company's reorganization plan, which proposed cutting as much as 75pc of its R1.5bn ($370.4mn) unsecured debt.

The Russian firms announced in September that they had agreed in principle to buy 51.5pc of Heringer, later purchasingthe rest of voting capital through a capital increase.

After regulators approved the plan, Heringer shareholders' approval was still necessary to complete the deal. Canadian producer Nutrien owns a 9.5pc stake and Morocco's OCP has another 10pc share, giving each of them the right of first refusal on offers for the Brazilian company.

In its note dated 27 December, Heringer said the parties failed to reach a consensus "despite the best efforts made to conclude the negotiation on acceptable terms and conditions".

Before Heringer's financial difficulties began, the company operated more than 20 blending plants and one SSP plant in Brazil.

By José Roberto Gomes