Dec 18 (Reuters) - OCI's (OCI.AS) shares jumped nearly 12% on Monday after the European chemicals maker said it had agreed to sell its stake in Iowa Fertilizer Company to Koch Ag & Energy Solutions for $3.6 billion.

The deal is expected to close in 2024, OCI said in a statement, adding that it will use the proceeds to cut its debt significantly. OCI's net debt stood at $2.3 billion at Sept. 30.

"A return of capital to shareholders will be considered within the context of OCI's capital returns framework," the company added.

The Dutch-listed company's shares were the biggest gainers on the pan-European STOXX index (.STOXX) at 0858 GMT, still up 11% at 22.35 euros.

OCI has been selling assets as it seeks to reduce debt, unlock more cash for shareholders and focus on greener chemicals such as lower-carbon ammonia.

On Friday it announced the sale of its 50% stake in ammonia and urea producer Fertiglobe to Abu Dhabi National Oil Company for $3.62 billion.

"This, in combination with the divestment of its Fertiglobe stake implies OCI will be meaningfully net cash, with significant potential to both return cash to shareholders and fund decarbonisation projects," Jefferies analysts said in a note.

ING analysts noted that after the two "transformative" disposal deals, the company nonetheless retains some nitrogen assets in Europe and methanol assets in Europe and the United States, with increasing exposure to the energy transition.

Morgan Stanley is acting as financial advisor to OCI on the IFCO deal while Cleary Gottlieb Steen & Hamilton is legal adviser.

https://www.reuters.com/business/oci-sell-entire-ifco-stake-koch-36-bln-2023-12-18/