Mosaic stockholders approve split from Cargill

Shareholders in fertilizer giant Mosaic Co. have approved the plan by which the company’s majority owner will sell off its 64 per cent stake.

About 58 per cent of the Mosaic shares held by shareholders other than Cargill were voted in favour of the agreement at a special meeting early last week, a company spokesperson said.

U.S. agrifood giant Cargill announced in January that it plans to distribute its stake in Mosaic to Cargill shareholders and debtholders.

The sale terms call for privately-held Cargill to swap about 179 million of its 286 million Mosaic shares with Cargill’s private stockholders — including, most notably, the charitable trust of the late Margaret Cargill, who died in 2006 — for some of all of their Cargill stock.

Cargill’s remaining 107 million Mosaic shares would be doled out in exchange for Cargill debt owned by third parties.

On completion, Mosaic shares held by the charitable trusts and Cargill stockholders taking part in this exchange would represent about 40 per cent of Mosaic’s total shares and at least 81 per cent of the vote in electing Mosaic’s board of directors.

The Mosaic shares going to the trusts and other Cargill shareholders will generally be considered non-transferable for the first two and a half years after a successful closing of this split-off.

The transfer restrictions on the Mosaic shares would be released, and the shares would become transferable, in three equal annual installments starting on the two-and-a-half-year anniversary of the split-off.

“Vote of confidence”

Following the shareholder vote, Mosaic on Thursday launched a secondary offering of 100 million shares of common stock, expected to be made up of 92.5 million shares owned by Cargill’s debtholders in a debt-for-equity exchange, and 7.5 million shares owned by Margaret Cargill’s charitable trust and foundation.

“This vote of confidence supports our belief that becoming a fully independent company will be good for our stockholders, customers and employees,” Mosaic CEO Jim Prokopanko said in a release last week announcing the results of the vote.

Mosaic’s ties to Cargill were formed when the fertilizer company was created in 2004 through the combination of Cargill’s fertilizer business with IMC Global. Mosaic’s potash mines include the world’s largest at Esterhazy, Sask., as well as mines at Belle Plaine and Colonsay, Sask. and in Michigan and New Mexico.

Mosaic announced in August last year that it would set up headquarters for its potash operations in Regina, bringing 120 head office jobs to that city and becoming the anchor tenant in a new downtown office tower at 12th Avenue and Hamilton Street.

The company has said it expects to boost its potash capacity to about 17 million tonnes through several expansion projects to be completed by 2020.

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