Canada's MBAC Fertilizer may restructure over cash crunch
WINNIPEG, Manitoba Oct 8 (Reuters) - Canada's MBAC Fertilizer Corp, which produces phosphate in Brazil, may need to restructure if it cannot raise capital, the company said on Wednesday.
It shares plummeted 36 percent, or 5 Canadian cents, to 9 Canadian cents in early trading in Toronto.
MBAC's "ability to continue as a going concern" depends on raising additional working capital and renewing existing facilities, the company said in a statement.
"In the event that the company is unsuccessful in implementing viable solutions to address its liquidity issues, it may be required to pursue formal restructuring options in Canada and/or Brazil," MBAC said.
The Toronto-based company has struggled to increase phosphate production and manage its debt at a time of weak fertilizer prices and souring investor sentiment toward the sector. It replaced its chief executive officer with Cristiano Melcher in January.
MBAC has secured access to $1.6 million in working capital from one lender, which it will use to buy phosphate rock to make its Single Super Phosphate product. The company said it is buying rock from third parties to lower production costs and reduce risks around ramping up output at its Itafos mine site in Brazil.
(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by Matthew Lewis)
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