Ferts major Yara writes down Lifeco investment in Libya by $112m

LONDON (ICIS)–Yara International on Monday announced that due to the “worsening security outlook in Libya” it has decided to write down the value of its investment in ammonia and urea producer Lifeco by $112m.

The Norwegian fertilizer giant said it “sees a high likelihood of a further deterioration in 2015 of the operating ability of the Lifeco joint venture plants” and described the feedstock and financial situation of the facility as “challenging”.

“Yara is evaluating the operation of the plants on an on-going basis in cooperation with the other partners, in order to protect the employees as well as the assets,” the Oslo-headquartered company said.

Yara will continue participating in the governance of Lifeco, with the aim of resuming full production once real improvements are seen in the security and political situation in Libya, creating a sustainable improved operating outlook for Lifeco.”

Following the write down in the Marsa El Brega facility – in which Yara holds a 50% stake and the National Oil Corporation (NOC) and the Libyan Investment Authority (LIA) a 25% stake each – Lifeco’s remaining book value is $18m, Yara added.

Located around 700km east of Tripoli, the Lifeco plants have suffered frequent planned and unplanned shutdowns in the past 18 months, limiting Yara’s ability to load ammonia and urea cargoes.

According to a Yara source, the plant was running just one ammonia and urea line as of 16 April. Two further lines remain shut down due to a lack of gas.

Yara used the LPG tanker Pertusola to load 11,000 tonnes of ammonia on 14 April and the cargo was discharged in Ravenna, Italy, on 17 April where it will be consumed for Yara’s downstream operations.