Carlsbad Current-Argus (LOCAL NEWS)
December 1, 2003

Mississippi to sell mines
 - By Teri Burns: Current-Argus Staff Writer

CARLSBAD – Mississippi Chemical Corp. has announced plans to sell its Eddy County subsidiaries of a Denver-based natural resources company for about $27 million.

The sale is part of the company’s reorganization efforts under Chapter 11 bankruptcy.

An agreement has been signed to sell “substantially all” of the potash assets of Mississippi Potash Inc. and Eddy Potash Inc. to subsidiaries of Intrepid Mining LLC, a Mississippi Chemical release states.

Intrepid Mining is a privately held company with potash mining and oil and gas operations in the Rocky Mountain region.

The estimated purchase price, effective as of Jan. 31, was determined by applying a purchase price formula to estimates of future working capital levels.  The purchasers will also assume certain liabilities, the release states.

In May, Mississippi Chemical and its domestic subsidiaries filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

At the time, Charles O. Dunn, president and chief executive officer of Mississippi Chemical Corp., cited the reasons as depression in the agricultural sector and the “extreme increase and volatility in the price of domestic natural gas,” resulting in “substantial financial losses for the company.”

The Intrepid agreement must now be approved by the U.S. Bankruptcy Court in Jackson, Miss.  Intrepid is making the purchase offer as a “stalking horse” bid, according to the release, meaning the next step will be an auction where other interested parties may submit bids as well.

The sale is expected to close in the first calendar quarter of 2004.

“The disposition of our potash mining operations is in furtherance of our objective of de-leverage and reorganize the company as quickly as possible,” Dunn said of the deal.

In June, Mississippi Chemical idled its plants at Mississippi Potash and MissChem Nitrogen LLC in Yazoo City, Miss.

Both the East and West mines in the Carlsbad area were shut down, “primarily due to excess inventories,” a Mississippi Chemical release states, with and expected restart timeframe of six to eight weeks for the West Mine and 10-12 weeks for the East.

The shutdowns meant the furlough of 378 employees in Carlsbad and 132 in Yazoo City.  The West Mine’s 204 employees returned to work sooner than anticipated when the company decided to re-open that facility at the end of July, citing and increased demand for red granular potash.

A spokesman said the company was slowly bringing back workers at the East Mine and planned to fill any positions vacated by employees who decided not to return.

In October, the company received court approval for a $32.5 million debtor-in-possession revolving credit facility and announced it had another $11 million cash on hand to find ongoing operations, also resuming full production in Yazoo City.

The Mississippi Potash East Mine was expected to be fully operational by mid-October.

“We are pleased to have secured this financing, which should be adequate to implement our planned reorganization,” Dunn stated in a release in October.  “The combination of this credit facility, cash on hand and the restart of our key facilities not only strengthens our ability to serve our customers’ and suppliers’ needs’ going forward, but also enhances our presence in the marketplace.”

By the beginning of November, The Associated Press reported all employees had returned to work.

According to the AP, the company permanently laid off seven of its Yazoo City nitrogen plant workers in October and closed one of its two Donaldsonville, La., ammonia factories in December, cutting 100 of the 200 jobs there.