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, Sask. potash mine — which the company values at nearly five billion euros (C$7.32 billion) — or bringing in an industry partner. It ruled out an outright sale of the facility.
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 favouring 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 PotashCorp, of 41 euros per share.
— Reporting for Reuters by Ludwig Burger.