AIM-listed ATOME, the world-leading low-carbon fertiliser developer and the UK's only dedicated international industrial scale low-carbon fertiliser company, has provided an update on its Villeta Project in Paraguay.
Villeta Discussions
ATOME continues to seek in good faith the negotiation of a solution to its investment dispute with Paraguay and in this context has maintained confidential discussions with relevant stakeholders in the country. In the meantime, ATOME’s debt and equity providers remain patient and supportive with certain funders offering potential further financial support should it be necessary.
ATOME is also working constructively with its EPC contractor, Casale S.A., with regard to a cost-effective path forward in the event that an agreement with Paraguay is reached.
In all the discussions, ATOME has at the forefront of its mind the best interests and protections of its own shareholders, adopting a holistic approach to the issues.
Arbitration
Whilst ATOME remains cautiously optimistic that a satisfactory resolution can be achieved, it is also cognisant that timing is important. The three-month waiting period requirement under the UK-Paraguay the Bilateral Investment Treaty (“BIT”) expires on 17 December, at which point, if no satisfactory progress is made, ATOME will be able to submit its arbitration claims.
In the event that the investment dispute cannot be resolved amicably for whatever reason and the project fails, then ATOME considers that the debt funding arrangements with IFC, IDB Invest, the European Investment Bank, FMO and the Global Climate Fund, together with the preferred equity subscription arrangements with Hy24, IFDK, DEG and IFC (all defined as in previous announcements), as well as the offtake agreement with Yara International and likewise the EPC contract and all arrangements and commitments between Casale and the Villeta Project, will fail and be terminated, including the cancellation of their interest in ATOME’s shares.
Taking into account the robust legal opinion on merits received from ATOME’s legal advisors, White & Case LLP, together with the detailed independent assessment on quantum, without prejudice or limitation to ATOME’s rights, ATOME has been informed on current available information that its potential claim for gross potential damages in the event of success in the arbitration, as presently assessed, could extend well into nine figures in US dollars. Despite the positive legal advice received by the Company, shareholders should note that there is no certainty at this stage as to what the level of a determined arbitration award would be. In the event that arbitration proceedings are commenced, the Company will give further details at that time, including as to timing.
While ATOME continues its discussions, favouring an expeditious resolution and a return to business as normal, the Company will take whatever steps are necessary to act in the best interests of its shareholders.
Source: ATOME
