(Reuters) – German potash miner K+S on Tuesday said it would no longer need to draw on a German state credit line it was granted last year, citing financial relief from the sale of its U.S. salt business.
K+S last August reached an agreement for a 350-million-euro ($428 million) credit line from Germany’s state development bank KfW after it was hit by low potash prices and by the fallout from the coronavirus pandemic. [L8N2FF0UI]
K+S said on Tuesday it repaid about 1 billion euros in financial liabilities immediately after the sale of the salt operations to Stone Canyon Industries Holdings which closed last month. Net proceeds from the transaction of around 2.6 billion euros will be used to repay liabilities, it added.
Cost cuts would enable all its remaining production sites to generate a positive free cash flow from 2023 at the latest, even in the event of low potash prices and weak demand for de-icing salt, the company added.
($1 = 0.8187 euros)
(Reporting by Bartosz Dabrowski in Gdansk; Additional reporting by Anita Kobylinska; Editing by Jonathan Oatis, Tomasz Janowski and Louise Heavens)