CHICAGO - The Iowa Fertilizer Co. plant under construction needs an additional $100 million, the company reported in a recently posted bond disclosure.
The additional funds will bring the total cost of the project - financed with nearly $1.2 billion of the state's share of Midwestern Disaster Recovery bonds - to $1.9 billion. The company attributed the needed funds to the results of change orders submitted by the contractor.
Iowa Fertilizer and its parent, OCI N.V., "are evaluating financing alternatives to provide the additional funding in the form of additional equity and debt in some form, in compliance with the provisions of the Bond Financing Agreement and other financing documents," according to the disclosure filing.
Construction on the project was slightly behind schedule due to the harsh winter but the project is making "timely progress" and commodity price expectations remain on target, Fitch Ratings said in a May report.
The rating agency in a May 8 report affirmed its BB-minus rating, three notches below investment grade, and stable outlook on $1.19 billion of revenue bonds issued by the Iowa Finance Authority to finance construction of the nitrogen fertilizer plant in southeast Iowa.
The bonds were sold on behalf of the developer, owned by Cairo, Egypt-based Orascom Construction Industries. The company made an equity contribution of $581 million to the project. The project also received other local and state subsidies.
The bonds are secured by a first priority security interest in all tangible and intangible assets of the project and a pledge by Iowa Holding LLC of its membership interests in the Iowa Fertilizer Co.