CVR Energy to weigh potential nitrogen fertilizer spinoff

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CVR Energy (NYSE:CVI) +2% post-market Monday after saying it will explore a potential spinoff of its interests in the nitrogen fertilizer business, which is owned by CVR Energy through the general and limited partner interests it holds in CVR Partners (NYSE:UAN).

The potential spinoff would create a new public company for the nitrogen fertilizer business from CVR Energy's (CVI) refining and renewables businesses, which likely would be structured as a tax-free, pro-rata distribution to all CVR Energy stockholders.

If completed, CVR Energy (CVI) stockholders would own shares of both CVR Energy and a holding company, holding CVR's current ownership of the general partner interest in and ~37% of the common units representing limited partner interests of CVR Partners (UAN).

CVR Partners (UAN) "remains a favorite due to its low valuation, diversified feedstock sources and renewed production levels," Harrison Schwartz writes in an analysis published recently on Seeking Alpha.