China’s sovereign wealth fund CIC acquires 12.5% in Russian fertilizer miner Uralkali
24 Sep 2013
Russian potash fertilizer company Uralkali yesterday said that China's sovereign wealth fund China Investment Corp (CIC) had acquired a 12.5 per cent stake through the conversion of bonds into ordinary shares.
Uralkali, one of the world's largest potash producers, informed the stock exchange that it was notified by Chengdong Investment Corporation, a unit of CIC, that their stake in Uralkali is 12.5 per cent.
The increase in the stake was due to conversion into ordinary shares of the company's bonds held by Chengdong and issued by Wadge Holdings Limited, owned by Uralkali's major shareholder Russian oligarch Suleiman Kerimov.
The Berezniki, Russia-based company added that it is not a party to any agreement regarding this transaction.
Uralkali, which holds a 20-per cent market share of the world's potash, shook up the fertilizer market in late July when it quit from Belarusian Potash Co (PBC), one of the two big global potash cartels, sending stock price of potash miners plunging. (See: Potash industry in turmoil after Uralkali quits cartel)
The annual $20-billion global trade in potash is controlled by two dominant cartels - BPC and Canpotex.
BPC, which controlled 35 per cent of the world's potash supply, comprised Uralkali and Belaruskali, while Canpotex comprises of Potash Corp, Mosaic Co and Agrium, but Uralkali, in which Kerimov holds a 21.75 percent stake, said it is quitting BPC after alleging that its partner undermined sales accords.
Kerimov has widely reported by the Russian media that is in talks to sell his remaining stake to buyers, which include Russian billionaires Vladimir Evtushenkov, Mikhail Gutseriev and Dmitry Kogan.
