Terra expands with $268 million acquisition

Terra Industries announced recently that it has reached an agreement to purchase the troubled Mississippi Chemical Corporation for approximately $268 million.

Terra Industries announced recently that it has reached an agreement to acquire all of the outstanding shares of Mississippi Chemical for an estimated $268 million.

The transaction will include cash and assumed debt of $161 million and stock of $107 million. The final sale price will depend on Terra’s share price and closing adjustments.

Mississippi Chemical and its domestic subsidiaries are currently operating under Chapter 11 of the US Bankruptcy Code. Consequently, the purchase agreement and related amended plan of reorganisation are subject to approval by the US Bankruptcy Court for the Southern District of Mississippi, as well as other regulatory approvals.

Mississippi Chemical intends to file for Bankruptcy Court approval of the purchase agreement and related amended plan of reorganisation by the end of August.

Mississippi Chemical’s nitrogen and phosphate businesses will be separated and the phosphate business will be either sold or transferred to the holders of Mississippi Chemical’s 71/4% senior notes and Mississippi Phosphates’ 5.8% industrial revenue bonds. After confirmation of the amended plan of reorganisation, Terra will acquire all of the stock of Mississippi Chemical. The transaction is expected to be completed no later than the first quarter of 2005.

“Expanding our nitrogen manufacturing capabilities and diversifying our natural gas sources have been two important Terra objectives,” said Michael L. Bennett, Terra’s President and Chief Executive Officer.

“Mississippi Chemical’s 50% interest in the Point Lisas, Trinidad ammonia production facility will significantly enhance Terra’s flexibility by lowering production costs in a high natural gas price environment,” added Mr. Bennett. “Mississippi Chemical’s terminal assets in Donaldsonville and Houston provide Terra with access to new markets. We also expect the Yazoo City facility’s mix of upgraded products for agricultural and industrial markets to serve us well.”