Allana Potash sold to Israel Chemicals for $137 million
Canadian junior miner Allana Potash Corp. (TSX:AAA) has agreed to be acquired by fertilizer giant Israel Chemicals Ltd. (ICL) after it failed to raise the capital it needed to remain as a standalone company.
The market reacted positively to the news as the stock was trading almost 44% higher at 47.5 Canadian cents in Toronto at 11:18 am
The $109.50 million takeover(or Cdn$137M), aims to speed up development of Allana’s promising Danakil project in northeast Ethiopia.
“Considering the generally challenging financial environment for junior mining companies, we would expect the short and long-term financing needs of Allana to include potentially significant dilution to Allana’s current shareholders,” Allana chief executive, Farhad Abasov, said in the statement.
ICL already owns 16.4% of Allana’s shares and the deal is expected to close by August 17.