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Uralchem Owner Mazepin Tipped as Possible Uralkali Buyer

Dmitry Mazepin

Dmitry Mazepin, owner of Russian fertilizer producer Uralchem, has joined the race to take a stake in the world's largest potash miner Uralkali, three sources familiar with the discussions said Tuesday.

Since Uralkali left a potash cartel with a Belarussian state company in July, speculation has mounted that its main owner, Suleiman Kerimov, would have to sell his 21.75 percent stake so it could be resurrected to support prices and soothe ties.

With his partners, Kerimov owns a third of the business.

Mazepin, who has a fortune estimated at $3.2 billion by Forbes magazine, could team up with Russian tycoon-turned-politician Mikhail Prokhorov in a possible deal, Vedomosti reported earlier Tuesday, citing unnamed sources.

According to three sources who spoke to Reuters, Sberbank is expected to finance the deal if it is agreed. Vedomosti said the second-biggest bank VTB was also ready to finance the deal.

"The deal is being discussed in detail now, but no final agreement has yet been signed," one of the sources said.

Uralchem, VTB, Kerimov's investment vehicle Nafta Moskva and Prokhorov's investment vehicle Onexim all declined to comment. Sberbank was not immediately able to comment.

Uralkali infuriated Belarus when it abandoned the potash export cartel with state-run Belaruskali, which had accounted for 40 percent of global sales. The soil nutrient accounts for a large share of Belarus's state revenues.

Belarussian President Alexander Lukashenko has called for a change in ownership, setting it as a condition for the freeing of Uralkali CEO Vladislav Baumgertner, who was arrested in Minsk in August and charged with abuse of power and embezzlement.

He is being held under house arrest. Russia has requested his extradition.

The latest purported deal structure follows a series of reports naming possible buyers for Uralkali, although a slump in potash prices caused by its dash for market share has raised questions about the viability of any deal.

Uralkali has a current market capitalization of about $15 billion, sources have said, while Kerimov himself values the company at $20 billion.

Vedomosti has previously quoted unidentified sources as naming three possible bidders for Kerimov's stake: Vladimir Evtushenkov, owner of the Russian oil-to-telecoms conglomerate Sistema, and his partner Mikhail Gutseriev; investor Vladimir Kogan with an Arab state fund; and Prokhorov.

Evtushenkov has been the only one businessman to publicly throw his hat into the ring so far.

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