Verdant gives green light to private equity takeover

CASH-strapped phosphate company Verdant Minerals has decided to accept a buyout from London-based private equity firm CD Capital, though Verdant’s major shareholder Washington Soul Pattinson is to maintain its 33.4% interest in the Ammaroo project in Northern Territory.
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Verdant is set to turn the lights out on its Ammaroo phosphate project

The deal values Verdant at A$40 million, with the price per share offered being about double levels the stock has been trading at for the past six months.

Verdant completed a feasibility study on Ammaroo last year showing it needed to find $368 million to develop the first stage of the project.

A further $200 million would be needed for the second stage development, with average earnings in the first five years of $74 million per annum rising to $166 million per annum in the second five-year period.

Verdant's managing director Chris Tziolis has been at the company since 2012.

CD Capital closed its most recent fund just over two years ago when it attracted US$355 million.

The firm was founded by Carmel Daniele.

The exit of Verdant continues a soft run for ASX-listed phosphate companies, with Phosphate Australia changing tack in recent years and morphing into Gibb River Diamonds after trying since last decade to build an NT business based on the fertiliser.

Coincidentally, both companies were led by ex-military types, with Tziolis previously commanding a patrol boat in the Royal Australian Navy, while Gibb River's Jim Richards was an officer in the British Army Parachute Regiment.

A third ASX-listed phosphate junior Aguia is continuing to try and progress its Tres Estradas project in Brazil, while also adding a copper exploration play into its portfolio last year.