Grains Oilseeds

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CVR Smells a Ripe IPO Market - Lisa LaMotta, 02.28.08, 5:09 PM ET

CVR Energy plans to capitalize on the greening of the nation with its decision to take its fertilizer division public.

CVR Partners, currently Coffeyville Nitrogen Fertilizers, is planning an initial public offering of 5.25 million common shares with 787,500 for overallotments, according to the Securities and Exchange Commission. The company will trade on the New York Stock Exchange under the ticker symbol CVE. The exact date of the IPO is yet to be announced.

The fertilizer company will offer the shares at $20 each after deducting underwriting expenses. The company has yet to name its underwriters, but expects that the IPO will generate $93.4 million. Following the offering, parent company CVR Energy, a petroleum refining business, will indirectly own about 87% of the company.

The company will use the proceeds to pay fees associated with its revolving secured credit facility, reimburse Coffeyville Resources, and $72.5 million will be used to expand its fertilizer plant.

CVR uses petroleum coke, a by-product of petroleum refining, to produce fertilizers and is in agreement to purchase petroleum coke from CVR Energy for the next 20-years. CVR is taking advantage of the hot market climate in the fertilizer industry. The demand for fertilizers stems from a need to increase domestic crop production to create more environmentally-friendly fuels, via better soil enriched with fertilizers.

Potash Corporation of Saskatchewan, a fertilizer company based in Canada, closed up 1.7%, or $2.69, to $162.29 on Thursday. CVR Energy also said to day that it will release its year-end earnings on March 10. Shares of the stock were down on Thursday by.78% or 23 cents, to $29.32.