Senator Suleiman Kerimov has acquired a 25 percent stake in potash miner Uralkali in a deal seen to ease political risks around the company.
Uralkali, whose export agent accounts for more than 30 percent of global potash sales, said in a statement Monday that its main shareholder, billionaire Dmitry Rybolovlev, sold 53.2 percent of Uralkali’s shares on June 11 to companies owned by billionaires Kerimov, Alexander Nesis and Filaret Galchev.
Kerimov has acquired the largest, 25 percent stake, Uralkali said without giving the price and other details.
Nikolai Dobrinov, vice president of IST Group, which is controlled by Nesis, said the group bought 13.2 percent in the potash miner, while Galchev acquired 15 percent.
A sale to a tycoon considered loyal to the Kremlin was seen as positive for the firm as investors feared that its tensions with the government over a mine flooding could escalate.
Uralkali has paid $250 million to compensate for the collapse of its Soviet-era mine in the Ural Mountains in 2006 instead of several billion dollars first threatened by powerful Deputy Prime Minister Igor Sechin.
In April, a Moscow court backed a demand by the tax service for the company to pay back-tax claims of 604 million rubles ($20 million) for 2005 to 2006. Uralkali has said it would appeal.
A source close to the deal said Rybolovlev sold the stake with a premium to the market as the price was based on his valuation of the company — $10 billion — rather than its market capitalization, currently at $8 billion.
This implies that Rybolovlev fetched $5.3 billion from the sale, and that Kerimov paid $2.5 billion for a one-quarter stake.
Rybolovlev, ranked Russia’s 10th-richest man by Forbes magazine with fortune of $8.6 billion, had a stake of between 65.6 percent in Uralkali before the sale, leaving him with 12.4 percent. He also owns about 25 percent of larger competitor Silvinit.
A source familiar with the deal told Interfax that Rybolovlev was planning to hold on to his remaining stake and plans to continue to participate in the company’s affairs.
Uralkali owns half of trader Belarusian Potash, which controls 29 percent of the global market for the nutrient, according to the company’s web site. Uralkali cut potash output by 45 percent last year to 2.6 million metric tons as demand for the fertilizer dropped.
Analysts have said one of the possible reasons for the sale could be Rybolovlev’s need for cash in his international divorce battle with his wife Yelena.
Uralkali’s London-traded shares closed up 5.2 percent at $19.93 on Monday.
(Reuters, Bloomberg, MT)
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.