The main owners of Uralkali have sold bonds exchangeable into shares worth about $3 billion in a deal that could give a Chinese sovereign wealth fund a stake in the world's largest potash miner by output.
Uralkali said Friday the bonds had been sold to Chengdong Investment Corporation, a subsidiary of China's CIC, and to VTB Capital, a subsidiary of VTB.
The bonds are due in 2014 and exchangeable into a 14.5 percent stake in Uralkali worth more than $3 billion at current prices. China's CIC could exchange its bonds into a 12.5 percent stake and VTB to a stake of 2 percent.
The bonds were sold by four core Uralkali shareholders, led by tycoon Suleiman Kerimov, who between them own 45.3 percent of the group.
Sources familiar with the deal said it showed that Russia's natural resources sector was open to strategic investment from its fast-growing Asian neighbor, a major buyer of the mineral fertilizer.
"Russia sits on extremely interesting opportunities in resources," one said, adding that such a deal had only become possible thanks to a significant improvement in bilateral ties in recent years between Moscow and Beijing.
The Uralkali transaction is the second involving CIC and VTB Capital in Russia this year, after the pair in May bought 7.5 percent in Polyus Gold, Russia's largest gold producer, for $635 million.
Related articles:
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.