Debt-laden Australian ammonia producer Burrup Fertilisers has been put up for sale, according to a well-informed source, with bids for a business that could be worth up to $1.5 billion due on May 30.

Information on the assets for sale, a 65% stake in Burrup Holdings which owns a 760,000 tons a year ammonia plant in Western Australia, was sent to potential bidders on Monday, the source said.

Companies which have previously expressed interest in the business, which is currently in receivership, include Burrup's 35% owner, Norway's Yara, as well as Australia's top fertilizer maker Incitec Pivot, explosives maker Orica, and conglomerate Wesfarmers.
A Norwegian analyst who declined to be named said his best guess was that the company would go for about $1.5 billion.

"It would definitely surprise me if it's below $1.2 billion, that is, on a 100% basis," he said. "Maybe a better approximation would be $1.5 billion," the analyst added, indicating the 65% stake could be sold for up for $1 billion.

Fertilizer maker Yara has the right to match the best bid for Australia's largest fertilizer maker.

"This has definitely been an important investment for us and it is natural for us to take part in the process which is underway," said Yara spokesman Thor Giaever.

"In principle, there would be nothing preventing us from keeping our current stake and have a new industrial partner," he added.
Yara announced in March it was building a technical ammonium nitrate plant in Western Australia, next to Burrup's ammonia plant, in a joint venture with Burrup.

Incitec Pivot said Burrup's plant could boost its business in the key Pilbara region, where Incitec supplies explosives to Australia's iron ore miners, who need growing volumes of explosives to support big mine expansions.

"It's natural that we would have a look at that asset," Incitec Chief Executive James Fazzino told reporters on Monday after the group released its first-half results.

Fazzino said any acquisition would have to meet the group's hurdle of a 15% internal rate of return.

"We have a very, very disciplined approach," he said. Incitec Pivot has appointed Credit Suisse to advise it on the bid.

Burrup, who's main shareholder is the Oswal Group of India, went into receivership last year, owing more than A$800 million dollars ($861 million) to Australia & New Zealand Banking Group, according to local media.

Along with the ammonia plant, Burrup Holdings owns a project to build a Technical Ammonium Nitrate (TAN) production plant next to the ammonia plant. TAN is the main ingredient in explosives used in mining.

The sale is being run by boutique advisory firm Flagstaff Partners and receivers PPB Advisory.