# BOY - Burrup Fertilisers



## Miner (31 May 2008)

This is a massive IPO coming to market - any one would like to add to this IPO future with strong food demand, high fertiliser value .....

Commsec is the lead manager+

Some extract from Commsec 


Burrup is presently 70% owned by the Burrup Trust and 30% owned by Yara. The offer of shares in Burrup is for approximately 223.1 million Shares at an Indicative Price Range of $1.75 - $2.25 per Share. Immediately after completion of the Offer, Burrup will be 53% owned by the Burrup Trust, 27% owned by Yara and 20% owned by new shareholders. 

Key Features of the Offer (extract from Commsec Site) 
Unique opportunity 
One of the world’s largest producing single train merchant ammonia plants 

Australia’s only merchant ammonia plant (I do not think that could be a great competitive advantage for 20 million population base, with high Oz dollar and production cost for export) 

20 year take-or-pay agreement for 100% of ammonia production with Yara 

High barriers to entry 

Attractive ammonia market fundamentals - with phosphate hype this could be an important part 

Key input *into fertiliser products which *are experiencing strong price growth 

Strong demand side fundamentals expected to drive increased fertiliser use and provide support to ammonia prices 

Recent Middle East spot ammonia price of around US$500 per tonne 

Long term gas supply agreement 

25 year (plus 5 year option) GSPA with Harriet JV *(Apache Corporation is operator) *

(Burrup Holdings, through its wholly owned subsidiary Burrup Fertilisers, commenced ammonia production in April 2006 with its stand-alone, 2,200 tonnes per day nameplate capacity Ammonia Plant. The Burrup Holdings Ammonia Plant is one of the world’s largest producing single train merchant ammonia plants, representing c. 4% of world production and c. 30% of Asia Pacifi c production
of tradable ammonia. Burrup Holdings is one of the lowest cost ammonia producers globally.
Under the current pricing mechanism, the maximum gas price in the final year will not exceed US$1.60 per GJ
*
The only issue could be the whole proceed of IPO will primarily go to buy 357 million shares from Oswal Family and nothing will be put back to enhance the asset - any comments here > *


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## doctorj (31 May 2008)

Miner said:


> Burrup is presently 70% owned by the Burrup Trust and 30% owned by Yara. The offer of shares in Burrup is for approximately 223.1 million Shares at an Indicative Price Range of $1.75 - $2.25 per Share. Immediately after completion of the Offer, Burrup will be 53% owned by the Burrup Trust, 27% owned by Yara and 20% owned by new shareholders.



That's my biggest concern - something thats been run almost as a family company for a while now will still be majority owned by the trust.


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## Lucky_Country (31 May 2008)

doctorj said:


> That's my biggest concern - something thats been run almost as a family company for a while now will still be majority owned by the trust.




Well with the register being so tightly held could also be a positive.
The Oswal family are becoming very prominent in WA and seem to be welcomed with open arms.


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## Miner (3 June 2008)

The Commsec book closed on Monday (public holiday in WA) itself for BOY IPO.
Now here is the extract from intelligent investor. I wonder why they published it on 2 June and not end of May . There are often some wonders on the positioning of a recommendation at certain stage. What favour did Intelligent Investor to its clients who already might have invested on BOY and also paid a good money in buying Intelligent Investor 
Any way here u go: 

" _ASX Code: BOY
*Recommendation: Avoid *
Price at Review: $1.750 
*Category: FLOAT
Issue: 249*Date: 2 Jun 08

Burrup Holdings is making the most of a precarious combination of locked-in gas costs and surging ammonia prices, but there’ll be trouble if anything changes.


The CommSec float email was designed to tickle the taste buds. ‘Ammonia investment opportunity: Burrup Holdings Limited’, it proclaimed, before teasing us with ‘attractive ammonia market fundamentals’, ‘strong cash flows’ and a ‘low cost base’. But the float of Western Australian Burrup Holdings has a pungent odour. *In fact, to put it bluntly, it’s one of the least attractive large floats we’ve ever seen*."_


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## Miner (5 June 2008)

The gas supply shortage has affected all miners in WA in particular
Once upon a time in 2004 Burrup helped WA Government with surplus power
Now when they need it most Burrup got the misfortune to prepone its shutdown
Luckily the public issue just got oversubscribed

More are given in West Australian and some of the extract 

*Business crisis looms after WA gas explosion
http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=77008
5th June 2008, 7:45 WST*

Burrup Holdings is also poised to bring forward a major maintenance shutdown of its Pilbara fertiliser plant after struggling to secure enough gas to keep the operation going in the wake of the explosion.

Burrup would not comment yesterday but it is understood the fertiliser group is likely to fasttrack the shutdown, originally scheduled for next month and due to last for at least two weeks while maintenance is performed. 
The timing of the *Varanus explosion is unfortunate for Burrup’s controlling shareholders, Pankaj Oswal and Yara Internation*al, who are in the middle of trying to raise up to $502 million from the $2.5 billion float of the fertiliser group.


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## SenTineL (6 June 2008)

There was a very negative report in The West today about a broker slamming the float and saying to steer right away from it, i remember a quote something to the tune of "it stinks" pun intended. 

I can't remember the details top of my head but a few things they mentioned were the volatility of ammonia prices and something about the way the float has been conducted.

Sorry paper is in the bin already....


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## Miner (9 June 2008)

One after another
First the industrial climate forced BOY to postpone its IPO
Then out of the blue the gas accident at Apache forcing BOY to postpone its float

Burrup float faces delay over gas shortage 
Refer West Australian 

"http://www.thewest.com.au/default.aspx?MenuID=77&ContentID=77654

9th June 2008, 6:30 WST 


_Indian billionaire Pankaj Oswal may be forced to delay the $2.5 billion float of his Burrup Holdings fertiliser operation for a second time amid severe gas shortages caused by Apache Corp’s Varanus Island explosion. _"

Mr Oswal got his Indian guru Bhai Shri flown from India to bless the occassion but BOY did not have any JOY. The gas accident stole the show  temporarily

What happening to the money now collected by Commsec through electronic collectio of IPO application money considering the float is not going to be started until the shut is finished or gas line comes back to normal whichever is later. 

Wishing all concerned a good luck as it is not a laughing matter and the gas incidence is going to be a national priority now.


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## doctorj (9 June 2008)

Miner said:


> One after another
> First the industrial climate forced BOY to postpone its IPO
> Then out of the blue the gas accident at Apache forcing BOY to postpone its float



And it looks like the facility will be offline for a few months.

If supply doesn't come online until, say September, I suspect the float will be postponed until early next year as the prospectus forecasts (which I presume will need to be reissued) will look bad, as will the first half numbers.

Those that have applied for shares should be able to have the funds returned - call Commsec or the company.


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## bassmanpete (12 June 2008)

Seems the Oswals are building what will be Australia's most expensive house:

http://netskool.blogspot.com/2007/07/perth-oswal-group-couple-radhika-and.html

The relevant article is about a third of the way down the page. Make of it what you will


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## Miner (14 June 2008)

Extract from Huntleys : not a good news. I hope Oswals do not have to sell the land before they built their most expensive dream house.

Fortunately for investors so far it is only Oswal's own money in BOY - so 100 % risk owned by them as well. Friday 13 appeared to be working on poor Oswals. 

*Burrup Holdings Limited (BOY)*
IPO delayed
*Recommendation Don ´t Subscribe *
Share Price 1.75 

Event
*Unfortunately BOY has deferred its IPO due to the Harriet gas supply disruptions. It will not accept applications. Previously the broker firm retail offer was to close today Friday June 13. *


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