Gensource Potash thanks Helm for subsidiary equity deal withdrawal
Gensource Potash Corporation on Thursday said it had revised its previously proposed ownership structure of its wholly-owned KClean Potash Corp. The Saskatchewan, Canada-based fertiliser…
(Alliance News) - Gensource Potash Corporation on Thursday said it had revised its previously proposed ownership structure of its wholly-owned KClean Potash Corp. The Saskatchewan, Canada-based fertiliser development company said Helm AG and Helm Fertilizers has withdrawn its proposed offer of 33% ownership in KClean. KClean is a company created to own and operate the Tugaske project in Saskatchewan.
KClean and the Tugaske project are currently 100% owned by Gensource. Gensource said the proposed 33% equity ownership offer by Helm in KClean "resulted in an unappealing-risk-return ration for new investors". The company said this is because investment for all parties only occurs at the close of the fill project financing, which meant there was an unequal ownership structure for incoming investors in KClean.
"The company thanks Helm for this action, which now provides the opportunity for Gensource and potential investors to work with an open capital structure to complete the financing of the Tugaske Project," Gensource said. Helm remains committed to buy 100% of all granular fertiliser produced at Tugaske. Gensource said it continues to progress its short-term financing, with the aim of advancing the bridge engineering work at Tugaske.
Chair Stephen Dyer said: "Although 2022 was one of the most challenging years in recent memory, we see a great opportunity with an appropriately balanced capital structure for KClean Potash Corporation which will allow Gensource to proceed with the required financing for the Tugaske project." The company said it expects to complete financing for the project through private equity and strategic investors, allowing construction to begin at Tugaske. Gensource shares were up 14% trading at 16.00 pence per share on Monday afternoon in London. By Harvey Dorset, Alliance News reporter Comments and questions to EMAIL Copyright 2023 Alliance News Ltd.
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