The board of Yara International ASA has signed off on a plan for an internal reorganisation and transfer of its clean ammonia business to a wholly owned subsidiary of the company.
The decision is a “preparatory step” for a potential initial public offering (IPO) of Yara Clean Ammonia (YCA) on the Oslo Stock Exchange.
The demerger and merger plan, signed yesterday (Thursday, June 2) follow Yara’s announcement on May 4, that it is evaluating a potential IPO of YCA
It will initiate an internal process to organise YCA assets and contracts into dedicated entities and subsidiaries that, for now, will remain under Yara’s ownership.
“The reorganisation is not expected to trigger any material tax impact,” the company stated.
The board of directors of Yara has proposed that the transfer of YCA is carried out by way of a demerger whereby the YCA business is transferred to an intermediary company.
After the demerger, the intermediary company is immediately merged with the newly established Yara Clean Ammonia Holding AS (YCA Holding), by way of a triangular merger.
YCA Holding will be a wholly owned subsidiary of Yara.
The plans have been submitted for registration with the Norwegian Register of Business Enterprises
The proposal will need to be approved at an extraordinary general meeting (EGM), details of which will be published in due course, according to the company.
Yara believes that clean ammonia will play a crucial role in zero-emission shipping fuel, power generation, green fertiliser production and other industrial applications.
This move reflects the Norwegian-based company’s strategic ambition to “enable the hydrogen economy”.
The company has said that potential IPO would raise capital to accelerate the growth of YCA, better realise the value of the business and support increased management focus.