SQM Holding Companies Plunge in Santiago on Share Sales

Norte Grande SA and Soc. de Inversiones Oro Blanco SA, two holding companies controlled by Chilean fertilizer mogul Julio Ponce, plunged in Santiago after disclosing plans to sell a combined $467 million in new shares.

Norte Grande fell 14 percent to 2.1 pesos as of 11:25 a.m., while Oro Blanco lost 11 percent to 3.11 pesos.

Ponce has said that the capital increases are needed to satisfy holders of debt that is secured partly by shares of fertilizer producer Soc. Quimica y Minera de Chilena SA, known as SQM. That company’s shares have plunged since late July, when Russia’s OAO Uralkali, the world’s largest potash producer, announced the end of a trade agreement with its Belarusan counterpart Belaruskali that had propped up global prices.

“They need the capital injections to back up the guarantees after SQM’s slump,” Leonor Skewes, an analyst at brokerage BICE Inversiones, said in a phone interview from Santiago.

Norte Grande will call a shareholder vote to sell $177 million in new shares, while Oro Blanco plans to sell $290 million, according to separate filings sent yesterday to the local securities regulator.

Ponce controls SQM through a cascade of holding companies that includes Norte Grande and Oro Blanco in addition to Soc. de Inversiones Pampa Calichera SA, Potasios de Chile SA and Nitratos de Chile SA.

Ponce said in a filing Aug. 20 that the drop in SQM’s shares left Norte Grande and its units in a “delicate” financial position. Norte Grande owns 75 percent of Oro Blanco, according to data compiled by Bloomberg.

SQM shares have been the worst performer in the IPSA index in the last 12 months, with a 54 percent loss.

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