Koch Nitrogen Bids on Farmland Assets

KANSAS CITY - Feb 18/03 - SNS -- Koch Nitrogen Company of Wichita, Kansas has entered an agreement to buy nitrogen fertilizer assets from Farmland Industries.

One agreement includes selected Farmland domestic fertilizer assets, and the other, Farmland's share of Farmland MissChem Limited (FMCL), which owns an ammonia plant in the Republic of Trinidad and Tobago.

The total value of the proposed sale of the U.S. assets and the FMCL shares is approximately $270 million, including adjusted cash proceeds of $104.4 million for the domestic assets and $86.5 million for the FMCL interest. The remaining $79.1 million is total liabilities being assumed by Koch Nitrogen from the two businesses. The agreements are subject to court approval as "stalking horse" bids and then an auction process.

The agreements include adjustments for working capital, debt and assumed liabilities. The domestic agreement includes Farmland plants operating in the United States along with substantially all domestic storage facilities. The second agreement includes Farmland's 50 percent ownership in FMCL. Farmland owns FMCL jointly with Mississippi Chemical Corp.

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