22nd Apr 2016 08:14
LONDON (Alliance News) - African Potash Ltd said Friday its supply agreement with Windmill (Pvt) Ltd has been terminated, but said it has signed a sales participation deal for potash with Safyr Commodities, which has, in turn, secured a sales agreement with Nyiombo Investments Ltd.
Safyr Commodities is a company jointly owned by the chairman of Beryl Holdings Pty Ltd, Neverl Kambasha, and financial services group Safyr Group.
African Potash said the conditional sale agreements with Nyiombo, an importer and distributor of fertiliser, is for 50,000 metric tonnes of urea and NPK fertiliser.
Under the deal with Safyr Commodities, African Potash said it will be paid a fee of 25% of the net income received by Safyr, up to a maximum of USD4.0 million. Net income will be the net margin received by Safyr before deducting any associating financing costs.
African Potash said delivery is to take place by July 31 and said the payment of the fees is subject to Safyr and Nyiombo successfully concluding delivery and payment.
African Potash said "the drought currently affecting much of southern Africa has had a marked impact on the fertiliser market and in particular the demand for urea in Zimbabwe".
It noted the agreement with Windmill (Pvt) originally announced in December has been terminated. The company's supplier, Beryl Holdings, has withdrawn the inventory held on consignment, it added and said no further sales or liabilities are expected to arise following the termination of the agreement.
Shares in African Potash were down 39% at 0.889 pence on Friday.
By Hannah Boland; [email protected]; @Hannaheboland
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