Uralkali Starts $1.6 Billion Share Buyback to Support Price

OAO Uralkali (URKA), the world’s largest potash producer, approved a $1.6 billion share buyback program after the stock fell 14 percent from this year’s high.

The company’s board authorized a one-year share repurchase plan after a previous buyback ended last month, Uralkali said today in a regulatory filing.

“The buyback should support the market price of our stock,” Chief Financial Officer Viktor Belyakov told reporters late yesterday in Moscow.

Uralkali, controlled by a group of billionaires of which Suleiman Kerimov is the largest investor, spent about $863 million buying back its stock in the last $2.5 billion one-year program. The company said at the time it would distribute the remaining cash in the form of a special dividend or announce a new buyback.

Uralkali is unlikely to use the whole $1.6 billion of funds allocated for the buyback, Belyakov said. The company hasn’t ruled out a special dividend which will depend on the situation in the potash market, he said.

Once the new program ends, Uralkali plans to cancel the shares that have been repurchased, Belyakov said.

Uralkali rose 2 percent yesterday to 235.31 rubles after the company said its board was considering another buyback. The stock is down 14 percent from July’s closing high for the year.

The company said last week its owners sold bonds exchangeable into 12.5 percent of the stock to China Investment Co.

To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net

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