The Associated Press
December 1, 2003

Mississippi Chemical sells two potash subsidiaries

YAZOO CITY, Miss. (AP) – Mississippi Chemical Co. announced Monday that it has sold two potash subsidiary companies to Denver-based Intrepid Mining LLC.

Mississippi Chemical filed for Chapter 11 bankruptcy protection in May.  The company has set no date for emerging from bankruptcy. 

The company announced earlier that is would sell its ammonia plant in the Republic of Trinidad and Tobago to Koch Nitrogen for $127 million, including $92 million in cash and $35 million in assumed liabilities.

Charles O. Dunn, president and chief executive officer of Mississippi Chemical Corporation, said Monday that the sale of the potash mining operations ”is in furtherance of our objective to de-leverage and reorganize the company as quickly as possible.”

Mississippi Chemical officials said Intrepid Mining, a privately held natural resources company, will pay about $27 million for Mississippi Potash Inc. and Eddy Potash Inc.  The price is based on applying the purchase price formula under the agreement to estimates of future working capital levels.  In addition, Intrepid will assume certain liabilities.

Officials said the deal must be approved by the U.S. Bankruptcy Court in Jackson.

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

Intrepid is offering what is called a “stalking horse bid”.  Other companies interested in buying Mississippi Chemical’s  potash interests will have a chance to bid at an auction after Intrepid’s bid is approved by federal bankruptcy court.

Mississippi Potash, Inc., which had approximately $69.5 million of net sales in fiscal 2003, owns and operates two mines and related facilities in the Carlsbad, NM area.  In addition, it owns Eddy Potash, Inc., which suspended operations in December 1997.  During fiscal 2003, the two operating mines produced about 872,000 tons of potash.

Like the rest of the fertilizer industry, Mississippi Chemical has been squeezed by steep natural gas prices, weak agricultural demand and price competition from overseas producers.

In November, Mississippi Chemical said it brought back 510 workers furloughed last summer to its Yazoo City plant and two mines in New Mexico.  At the same time, the company permanently laid off sever of it’s Yazoo City nitrogen plant workers.

The company had already permanently closed one of its two Donaldsonville, LA, ammonia plants in December and cut 100 of the 200 jobs there.

Mississippi Chemical also operates plants in Pascagoula and Houston.

Intrepid Mining LLC is a privately held Denver-based natural resources company with existing potash mining and oil and gas operations in the Rocky Mountain region of the United States.