About Yara

2006: Yara divests its ammonia fleet to Bergesen Worldwide

In the third quarter of 2006, Yara completed the divestment of most of its LPG/ammonia shipping assets to Bergesen Worldwide Gas (BW) Gas.

In total, the agreement comprised the sale of seven fully-owned ammonia vessels and three charter-parties at a price of USD 347 million.

This divestment decision was taken as it was decided that Yara’s shipping operation was no longer part of its core business activities.

The deal was first announced in April of 2006 but was subject to final approvals from competition authorities. The acquisition of Yaraship AS, which owned five of the vessels, took place on July 1, 2006, whereas the three time-charter vessels were taken over in November 2006, September 2007 and December 2007, respectively. The two remaining liquid gas carriers were also taken over in July and August 2006.

New partners

As part of the deal, Yara and BW Gas also signed a partnership agreement under which the vessels were time-chartered back to Yara for periods ranging from three to 15 years. The transaction cost was based on future freight contracts for Yara using assumed market rates. The partnership meant an increase in flexibility for both Yara and BW Gas, providing a platform for future expansion of their seaborne ammonia trading and transportation businesses.

Despite increased initial costs, Yara realized considerable gains in 2006 through the divestment of the ammonia fleet. The partnership agreement secured continued shipping of ammonia at competitive terms while ownership and operation of the fleet was taken over by a leading global operator.

Commenting on the deal, President and CEO of Yara, Thorleif Enger, said: "Our shipping fleet has, and will continue to represent an important competitive advantage for Yara for many years. While commercial control remains a core activity for Yara, ownership of shipping capacity is not. With BW Gas we establish a leading edge partnership. Their strength as the leading shipping service supplier within the LPG/ammonia segment will increase our flexibility and support our growth ambitions."

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