* CEO Borgas stepping down after 4 years on job
* Potash prices roughly halve during Borgas term
* Deals signed with China, India for $219 and $227 per tonne
By Steven Scheer
JERUSALEM, Sept 11 Stefan Borgas stepping down
as chief executive is the latest in a series of issues that have
plagued Israel Chemicals (ICL), and the company's
fortunes are not expected to turn around in the foreseeable
future given very low potash prices.
German-born Borgas, 52, said on Thursday he would resign as
ICL's CEO after four years but would stay available to the
company during the transition to find a new CEO.
ICL Chairman Johanan Locker said there would be a search for
a new head, but analysts believe any CEO will face a tough task.
"You can't expect higher profit when potash prices are $200
a tonne," said Ilanit Scherf, an analyst at the Psagot
When Borgas took the reins after serving as CEO of Swiss
firm Lonza, ICL - one of three major suppliers of potash to
China, India and Europe - was in good shape with a share price
of 46 shekels and adjusted earnings per share of $1.19 in 2011,
when potash prices were around $414 per tonne.
In recent months, ICL has signed potash supply deals with
China and Indian customers at $219 and $227 a tonne,
Citi analyst Andrew Benson expects adjusted EPS in 2016 of
just 30 cents.
"ICL faces a tough road ahead although this is substantially
discounted in the share price," Benson, who rates ICL "neutral",
wrote in a note to clients. "Fertilizer markets will remain
intensely competitive over the medium term (and) ... higher
royalty levels will materially reduce cash flow availability for
shareholders from 2017 onwards."
Since the start of 2013, ICL's Tel Aviv-listed share price
has slid 85 percent to 15.42 shekels.
Borgas also battled Israel's government over plans to
heavily tax mining companies. In the process, he tried to cut
costs, froze about $2 billion of investments in Israel and
expanded ICL's operations abroad.
Analysts believe Borgas' desire to reduce dependency on the
Dead Sea, where ICL has exclusive permits to mine minerals, was
unpopular with his bosses at holding company Israel Corp
, which owns 46 percent of ICL.
Citi's Benson said challenges ICL's next CEO faces, besides
restoring the financial health of the company, include improving
industrial relations after two recent strikes and establishing a
better relationship with Israel's government.
ICL competes with Russia's Uralkali and North
American trading group Canpotex Ltd, owned by Potash Corp of
Saskatchewan, Mosaic Co and Agrium Inc
(Reporting by Steven Scheer; editing by Susan Thomas)