Jan. 9 (Bloomberg) -- Sigdo Koppers SA plunged the most in 15 months after El Mercurio reported that the Chilean holding company may suspend an ammonia project in Peru.
Shares retreated 3.4 percent to 1,146.3 pesos at the close in Santiago, the steepest decline since Sept. 22, 2011. The benchmark Ipsa index advanced 0.5 percent.
The Santiago-based company, which controls subsidiaries in explosives, mining equipment, construction, auto dealers and port operations, may indefinitely postpone a project to build an $850 million ammonia and ammonium nitrate plant in Peru as it has tried unsuccessfully in the last five years to secure natural gas supply contracts, El Mercurio wrote today.
“If confirmed, this is bad because we view the project as a positive catalyst for the stock,” Jose Manuel Edwards, an analyst at Santiago-based brokerage IM Trust SA, said by phone. “We hadn’t included it yet in our target price calculations because it’s only in the initial study phase.”
IM Trust has a buy recommendation and a target of 1,348 pesos for the stock, 18 percent higher than the current price.
El Mercurio cited unidentified sources from Enaex SA, Sigdo Koppers’s explosives production unit. The Santiago-based newspaper cited Geir Skarstein, chief executive officer of Nitratos del Peru, the company in charge of building the plant, as saying it has tried to secure gas from Peru’s Camisea project. Moving the project to another country is an option, Skarstein was quoted as saying.
Sigdo Koppers’s press office did not return phone calls from Bloomberg News seeking comment.
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