Billionaire Ofer’s ICL Said to Explore Ways to Reduce Debtby
Potash miner said to weigh sales of bonds, hybrid securities
Company has $3.7 billion in debt, most of which is due by 2021
Israel Chemicals Ltd., controlled by billionaire Idan Ofer, is exploring ways to reduce debt after commodity prices fell, according to two people with knowledge of the matter.
In meetings with banks, ICL has discussed the sale of bonds or debt-equity hybrid securities, the people said, asking not to be identified because the talks are private. The company has also said it’s considering the sale of non-core assets such as its water desalination unit, IDE Technologies Ltd.
The company isn’t planning to issue hybrid securities at the moment, a spokesman said, declining to comment further.
Mired in an industry-wide slump that has slashed prices for potash, ICL’s most profitable business, the company has cut jobs in Europe, China and Israel and closed mines as part of Chief Executive Officer Stefan Borgas’s five-year target of $500 million in savings by 2018. About half the company’s 14 billion shekels ($3.7 billion) of outstanding debt is due within five years, data compiled by Bloomberg shows.
The company’s board also decided in May to cap the dividend payout ratio at 50 percent of adjusted annual net income for this year and the next, down from 70 percent. ICL paid $7.5 billion in dividends over the past ten years, or about 80 percent of profits in the period, outgoing chairman Nir Gilad said in an e-mailed statement on Wednesday.