Yara International - EGM 17 November 2020
ECGS notes that as a result of the Covid-19 pandemic the EGM will be held as an electronic meeting only. Consequently, it will not be possible to attend the EGM in person.
In general, Yara International is in compliance with the Norwegian regulations relating to the organisation and procedures of the EGM.
Under ITEM 3 the board of directors proposes to distribute an extraordinary dividend of NOK 18.00 (USD 2.05) per share.
ECGS notes that the proposed extraordinary dividend relates to the divestment of Yara International¶s 25% interest in Qatar Fertiliser Company ("QAFCO").
Based on the Company¶s share capital as of Q3-end, ECGS estimates the proposed extraordinary dividend to amount to almost USD 550 million in aggregate. As such the total amount to be distributed is covered by the proceeds generated from the QAFCO transaction (USD 1.0 billion).
However, ECGS would have preferred that Yara International had retained a substantial larger part of the proceeds from the QAFCO transaction in view of the current uncertainty relating to the Covid-19 pandemics. These proceeds could, for example, be used to boost the currently declining revenues (-12%, up to and including Q3-end) and/or to maintain its current investment level (USD 1.1 billion capex for the FY2019).
That having been said, since the Company¶s level of net debt (USD 2.3 billion up to and including Q3-end) and corresponding net debt to EBITDA ratio (1.04x as of the same date) both are within acceptable limits to justify the proposed extraordinary dividend payment, ECGS recommends to vote FOR.
Yara International is a holding company. Through its subsidiaries, Co. converts energy, natural minerals and nitrogen from the air into products for farmers and industrial customers. Co. provides mineral fertilizers, industrial products and environmental products and services to its customers. Its mineral fertilizer portfolio, sold as five main brands (YaraMila, YaraLiva, YaraVita, YaraBela, YaraVera) represents a range of crop nutrients. Its industrial portfolio contains a range of nitrogen chemicals as well as CO2 and dry ice. Its environmental product and services reduce NOx emissions, control unpleasant odor, prevent toxic gases, avoid corrosion and improve water quality.
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