Uralkali Billionaires Owners Said to Plan to Replace CEO

Billionaires Mikhail Prokhorov and Dmitry Mazepin, whose companies today completed the purchase of 47 percent of OAO Uralkali, plan to name a new chief executive officer for the world’s largest potash producer within days, according to two people with direct knowledge of the matter.

Dmitry Osipov, deputy chairman of Mazepin’s OAO Uralchem, will replace Vladislav Baumgertner, the people said, asking not to be identified before an official announcement. Osipov’s candidacy was agreed upon by the new owners and must be approved at a special Uralkali board meeting, they said.

Baumgertner, 41, was arrested on Aug. 26 and spent a month in a KGB jail in Belarus after he withdrew his company from a joint venture with potash supplier Belaruskali. Belarus accused him of abuse of office in his capacity as chairman of the marketing venture. He was kept under house arrest in an apartment in Minsk from September until his extradition to Moscow on Nov. 21. He remains under house arrest in Moscow for the same charges, a condition of his extradition.

“Baumgertner is a very professional manager and the accusations against him are groundless in my view, but it would be hard for the new owners to negotiate a new venture with Belarus, while keeping Vladislav as CEO,” Elena Sakhnova, a VTB Capital analyst in Moscow, said by phone. “Osipov is seen as a good replacement in such circumstances.”

Photographer: Andrey Rudakov/Bloomberg

OAO Uralkali Chief Executive Officer Vladislav Baumgertner was arrested on Aug. 26 and spent a month in a Belarusian KGB jail after he withdrew his company from a joint venture with potash supplier Belaruskali. Close

OAO Uralkali Chief Executive Officer Vladislav Baumgertner was arrested on Aug. 26 and... Read More

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Photographer: Andrey Rudakov/Bloomberg

OAO Uralkali Chief Executive Officer Vladislav Baumgertner was arrested on Aug. 26 and spent a month in a Belarusian KGB jail after he withdrew his company from a joint venture with potash supplier Belaruskali.

Uralkali advanced 1.1 percent to 171.82 rubles in Moscow trading at 3:17 p.m.

President Lukashenko

Belarus President Aleksandr Lukashenko called for a change of ownership at Uralkali before talks could resume on rebuilding a partnership.

Prokhorov’s Onexim Group bought 21.75 percent of Berezniki, Russia-based Uralkali from billionaire Suleiman Kerimov’s foundation, spokesman Andrey Belyak said by phone today. The agreement was first announced last month. Another company controlled by Prokhorov bought a further 5.34 percent held by Kerimov separately, two other people said today, asking not to be identified as the information is private.

Uralchem, 95 percent owned by Mazepin, completed a deal to buy almost 20 percent of Uralkali from Kerimov’s business partners, it said today in a statement. The company borrowed $4.5 billion from VTB Capital, mostly to fund the purchase of Uralkali shares, it said on Dec. 16.

Uralkali’s staff are expected to a neighboring building that houses Uralchem’s headquarters in the Moscow City business district, the two people with knowledge of the CEO change said.

Photographer: Andrey Rudakov/Bloomberg

An employee passes a giant pile of potash grain inside a storage facility at the potash mine operated by OAO Uralkali in Berezniki. Close

An employee passes a giant pile of potash grain inside a storage facility at the potash... Read More

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Photographer: Andrey Rudakov/Bloomberg

An employee passes a giant pile of potash grain inside a storage facility at the potash mine operated by OAO Uralkali in Berezniki.

Imprisoned CEO

Uralkali’s press-office declined to comment as did spokesmen for Uralchem and Onexim. Interfax reported the plan to appoint Osipov earlier today.

“It’s not good for Uralkali to have a CEO not managing the company and in prison,” Uralchem CEO Dmitry Konyaev said on Dec. 4.

Baumgertner was CEO of Uralkali from 2005 until 2010, and was chief of OAO Silvinit in 2010 when it merged with Uralkali to form the largest producer of potash. He took on the CEO post at the combined Uralkali-Silvinit in February 2011.

Baumgertner graduated from the Urals Engineering University. He holds an MBA degree from London’s Kingston Business School and a University of London MSc degree.

Osipov, 47, was Uralchem CEO from 2007 through 2011. He graduated from Gorkovskiy State University’s department of radio physics and cybernetics.

To contact the reporters on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net; Irina Reznik in Moscow at ireznik@bloomberg.net

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

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