December 10, 2019 / 4:11 PM / 2 months ago

K+S says considering sale of stakes in North American businesses

FILE PHOTO: A headframe of salt producer K+S Group is pictured at a K+S potash mine near Unterbreizbach, near Bad-Hersfeld October 1, 2013. REUTERS/Ralph Orlowski

FRANKFURT (Reuters) - German potash and salt miner K+S said it was looking into selling stakes in its North American businesses because an ongoing cost cutting push would not yield enough savings to reach its debt reduction target.

A company spokesman said K+S was considering selling a stake in its Bethune potash mine in Canada - which the company values at nearly 5 billion euros ($5.5 billion) - or bringing in an industry partner. It ruled out an outright sale of the plant.

He added that K+S was also considering all options for its salt business in North and South America, which includes the Morton Salt brand.

The group was favoring a stake sale, which could be done via an initial public offering, the spokesman added.

K+S has slashed production this year in response to weak demand for potash, following the lead of rivals such as Nutrien.

The group said it had become clear that ongoing cost cuts alone were not enough to reach a target to cut net debt as a multiple of EBITDA to about 2.7 times by end-2020 from 4.3 times recently.

K+S in 2015 fended off a 7.9 billion euro takeover approach from Nutrien, at the time called Potash Corp of Saskatchewan, of 41 euros per share.

K+S shares closed 4.1% higher at 10.805 euros on Tuesday.

Reporting by Ludwig Burger; editing by Thomas Seythal, Kirsten Donovan

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