African Law Business
The acquisition of a fertiliser site in northern Morocco reflects the strengthening market for the product and the growing investor interest in the country.
An Isle of Man-registered fertiliser company has gained full control of the Khemisset Potash Project in northern Morocco, following its GBP 10 million purchase of Moroccan Salts Limited (MSL).
Emmerson produces potash, a fertiliser and the company was readmitted to the London Stock Exchange in June, following a round of fund-raising through the issuing of new shares, which raised GBP 6 million and allowed the purchase of MSL and completed the reverse takeover of MSL last month, in a deal which was originally agreed in October 2017, giving Emmerson 100% of the Khemisset project.
Emmerson subsequently announced that it had been awarded 15 additional permits for research at the site.
The price of potash is recovering after a crash two years ago, and the company is banking on increased local demand as well as the opportunity to export to Europe.
The executive director of Emmerson, Robert Wrixon, said of the deal: “With global demand for potash increasing, Morocco provides us with a stable and attractive environment to develop our operations and to benefit from its easy access to major markets.”
Moroccan Salts was represented by a team from international law firm DLA Piper consisting of Casablanca-based partner Saad El Mernissi and counsel Peter Finan, both from the firm’s finance, projects and restructuring group, and associate Marie-Michele Banzio from the corporate group. The team reviewed MSL’s Moroccan subsidiaries and the mining titles involved in the project.
DLA’s managing partner in Casablanca, Christophe Bachelet, said the deal “is further evidence of the confidence shown by international investors in the Kingdom of Morocco”.
In a statement last October, Cameron Pearce, chairman of Emmerson, said: “Emmerson plc was formed to acquire a natural resource asset in a stable jurisdiction with the potential to deliver significant returns to its investors. Having conducted an extensive search we believe we have found a superb target acquisition. Moroccan Salts has a substantial ground position in, and extensive technical information on the Khemisset potash basin, and has recently conducted confirmatory drilling on the project area. Both the recent and historic drilling results inform the view of Moroccan Salts Limited, shared by the company, that the project could emerge as a top tier global potash mine with potential to return substantial gains for new and existing shareholders.”
Morocco has been identified as a growing market for investment in recent times, partocularly as an entry point into the Africa for investment in the rest of the continent, based in part on its econmic recovery in the past few years, with EY identifying it as one of the most attractive countries for investment in a 2017 report.
