ATOME PLC (LSE:ATOM) is continuing negotiations with stakeholders in Paraguay over an investment dispute affecting its Villeta low-carbon fertiliser project, while preparing for the possibility of international arbitration if an agreement cannot be reached.
The company confirmed that the three-month waiting period under the UK-Paraguay Bilateral Investment Treaty expires on 17 December 2026, after which it may submit arbitration claims if negotiations have not produced satisfactory progress.
Negotiations Continue Over Villeta Project
ATOME said it remains engaged in confidential discussions with relevant Paraguayan stakeholders to seek a negotiated resolution to the dispute.
The company reported that its existing debt and equity providers remain supportive, with some funders indicating that additional financial assistance could be available if required.
ATOME is also working with engineering, procurement and construction contractor Casale S.A. to assess potential arrangements for proceeding with the Villeta project should an agreement with Paraguay be reached.
No resolution has been announced, and the company has not provided a timetable for concluding the negotiations.
Potential Arbitration Claim Could Reach Nine Figures
ATOME said legal advice from White & Case LLP, together with an independent assessment of potential damages, indicates that its gross claim could extend well into nine figures in US dollars if arbitration proceedings are successful.
The company emphasised that any potential award remains uncertain and that the assessment does not establish the amount that an arbitration tribunal might ultimately determine.
Under the applicable bilateral investment treaty, ATOME would become eligible to submit arbitration claims after the waiting period expires on 17 December.
The company said it would provide further information, including potential proceedings and timing, if arbitration is initiated.
Project Financing and Commercial Agreements at Risk
ATOME stated that if the dispute cannot be resolved and the Villeta project fails, it considers that the project’s financing and commercial arrangements would also fail and be terminated.
These include debt funding arrangements involving IFC, IDB Invest, the European Investment Bank, FMO and the Global Climate Fund, alongside preferred equity commitments from Hy24, IFDK, DEG and IFC.
The company also identified its fertiliser offtake agreement with Yara International and its engineering and construction arrangements with Casale as agreements that would be affected.
ATOME said termination would include the cancellation of the relevant parties’ interests in its shares.
These outcomes remain conditional on the dispute remaining unresolved and the project failing.
Villeta Project Secured $665 Million Financing in May
ATOME announced an unconditional final investment decision for Villeta in May 2026, following completion of a $665 million project financing package.
The development also has a minimum 10-year agreement with Yara International covering the purchase of its planned green fertiliser production.
Construction arrangements include a $465 million fixed-price engineering, procurement and construction contract with Casale S.A.
The project is intended to produce low-carbon calcium ammonium nitrate fertiliser for agricultural markets in South America.
Next Steps Depend on Negotiations
ATOME said its preference remains a negotiated settlement that would allow the Villeta project to proceed.
However, the company retains the option of pursuing arbitration once the treaty’s waiting period expires, subject to progress in its discussions with Paraguay.
The company has not confirmed whether arbitration will be initiated or when project development activities might resume.
More About ATOME
ATOME PLC (LSE:ATOM) is an AIM-listed developer of low-carbon fertiliser projects in Latin America. Its flagship Villeta project in Paraguay is designed to produce fertiliser using renewable energy, with planned sales targeting agricultural markets in the Mercosur region.
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