Industries Qatar Acquires Qp’s 25% Stake in Qafco USD 1 Billion Deal

Industries Qatar announced that the Company’s Board of Directors, in its meeting held on 23rd August 2020, has approved the proposed purchase of Qatar Petroleum’s 25% stake in Qatar Fertiliser Company (“QAFCO”), and to convene an Extraordinary General Assembly (“EGA”) meeting to obtain the shareholders’ approval of the transaction. The effective date of the transaction would be 1st January 2020, until expiry of the new Gas Sale and Purchase Agreement (“GSPA”), for a proposed purchase consideration of USD 1.0 billion. The date and timing of the EGA meeting will be announced in due course.

The purchase of QP’s stake in QAFCO is consistent with IQ’s strategy to build its presence and create value across the downstream sector. This transaction specifically enhances the shareholder value by transforming IQ into a 100% owner of the world’s largest single site urea producer and expanding its footprints in a well-established fertilizer business, with a proven track record of operational excellence and market positioning, along with resilient cash flow generation capabilities, spurred by synergistic opportunities.

As part of the transaction, QAFCO has entered into a new GSPA with Qatar Petroleum with effect from 1st August 2020 until 31st December 2035, covering the gas requirements of QAFCO trains 1-6 and Qatar Melamine Company (“QMC”).

In addition, and as part of the same transaction, IQ’s Board of Directors also approved QAFCO’s acquisition of Qatar Petroleum’s 40% stake in QMC, effective 1st July 2020.

Being the sole shareholder of QAFCO, IQ will now have full control of QAFCO, which would provide IQ the ability to appoint all members of QAFCO’s board of directors, and make investing, financing and dividend decisions, independently, where, QAFCO’s board will ensure the strategic alignment and oversee further creation of value for QAFCO and its sole shareholder.