Morocco's BCP bank buys stake in OCP for $600 mln

RABAT, Jan 12 (Reuters) - Banques Populaires Group (BCP.CS), Morocco's biggest banking group, is to pay 5 billion dirhams ($600 million) for a 5.88 percent stake in the Office Cherifien de Phosphate (OCP), the world's leading phosphate exporter.

The deal is intended to help the state-owned OCP to expand its business during the global economic crisis, which was hitting phosphate prices, officials from the companies said.

"The BCP-OCP partnership gives us a new capacity to implement our strategy," OCP's Chairman Mostefa Terrab told a news conference.

Average phosphate prices jumped from $300 per tonne in 2007 to $1,200 last year, but have fallen about 40 percent so far this month, said Terrab.

The deal would strengthen OCP's borrowing capacity and market visibility as it improves its net debt/equity ratio by 50 percent, he added.

OCP has a 45.5 percent share of the global market for lime phosphate, 49 percent of the phosphoric acid market and 12 percent of fertilisers, according to the company's data.

BCP bank's Chief Executive Officer Mohamed Benchaboun said the deal offered a new window of external growth for the bank.

Under the accord, OCP would also take a 6.6 percent share in BCP for 1 billion dirhams.

Both stakes are in the form of a capital increase and part of a government strategy calling for partnership between state-owned firms to help them grow.

"Listing of OCP on the bourse would take place in the mid-term," said Abdeltif Loudyi, a senior finance ministry official, but he gave no further details.

OCP's stake purchase is the second share deal by BCP bank since Oct. 31, when the bank bought a 50.1 percent stake in Upline Group, Morocco's second-largest independent investment bank.

BCP has Morocco's biggest retail banking network, with about 3 million customers.

"BCP partnership with OCP would underpin its strategy of external growth and expand its operation on the international market and confirm its rank as a major player in retail and investment banking," said Finance Minister Slaheddine Mezouar.

OCP plans to invest more than $3 billion in the 2009-2020 period to modernise facilities, upgrade infrastructure and increase capacity to produce phosphoric acid and fertiliser at its Jorf Lasfar site.

OCP said it also hoped the investment scheme would lure foreign operators who would invest additional money in joint ventures.

Morocco is the third-biggest phosphate producer in the world after China and the U.S., with 28 million tonnes of output a year. It is the largest phosphate exporter, with a 31.6 percent market share.

OCP expects to increase its phosphate output to 45-55 million tonnes by 2020 on the back of its planned investment, the firm said. (Reporting by Lamine Ghanmi, editing by Will Waterman)