OAO EuroChem, a Russian producer of fertilizer, is seeking a loan of as much as $800 million to help fund investment in potash projects, according to two people with knowledge of the matter.
Lenders have been asked to propose terms for the facility which may include secured and unsecured portions, said the people, who asked not to be identified because the terms are private. The company is seeking a debt maturity of more than five years and the deal may complete in the second half of the year, the people said.
EuroChem, owned by billionaire Andrey Melnichenko, is planning to invest $3.2 billion in its potash business in the next four years, it said in its 2012 annual report. The Moscow- based company currently generates most of its revenues from nitrogen and phosphate operations, according to the report.
The company raised a $1.3 billion five-year loan in 2011, which pays an interest margin of 180 basis points more than the London interbank offered rate, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
Vladimir Torin, a Moscow-based spokesman for EuroChem, didn’t immediately reply to a telephone call seeking comment on the financing. Potash is a form of potassium used to strengthen plant roots and protect against drought.
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