April 9 (Bloomberg) -- OAO Phosagro’s controlling holders, Andrey Guryev and his family, are selling a 9 percent stake to gain entry to the MSCI Russia index after the stock price of the largest European phosphate-fertilizer producer rose to a record.
A group of companies controlled by the Guryev family is offering the equivalent of 11.1 million outstanding shares in stock and global depositary receipts, according to a statement from Phosagro late yesterday. The stake is valued at more than $490 million based on the closing prices in London and Moscow. The book for the offering can be closed as early as today.
The family will reinvest about 45 percent of the proceeds in new stock in the company. Phosagro said it may sell as many as 13.5 million new shares in an open subscription.
“Phosagro picked a good moment for a share sale as its stock has gained recently and it’s fairly valued by the market now,” Kirill Tachennikov, an analyst at UBS AG in Moscow, said today by phone. Phosagro’s GDRs rose to a record of $14.77 in London yesterday, according to data compiled by Bloomberg. He sees the company’s free float increasing to 22.4 percent.
Phosagro’s initial public offering in 2011 raised $565 million through the sale of a 10.7 percent stake.
The latest sale may boost Phosagro’s free float to about 19 percent, allowing it to join MSCI indexes and boosting potential investors, said Denis Gabrielik, an Otkritie Capital analyst.
Phosagro fell 5.2 percent to 1,308 rubles by 2:30 p.m. in Moscow and the GDRs slid 4.6 percent to $14.09 in London.
The company plans to use most of the proceeds from its capital increase to consolidate its OAO Apatit and OAO Phosagro-Cherepovets units, Phosagro said in the statement.
Phosagro may spend as much as $150 million buying out Cherepovets shareholders, Chief Executive Officer Maxim Volkov said March 14. It may need about 2 billion rubles ($64 million) for the remaining 4 percent in Apatit, Interfax said yesterday.
It has already spent about 17 billion rubles acquiring Apatit stock from the government and smaller investors.
The Guryev family will buy about 5 million of Phosagro’s new shares, meaning the company may gain about $220 million for the units’ consolidation, Gablielik said.
“We expect an approximately twofold increase in Phosagro’s free float will have a positive impact on the liquidity of our shares and GDRs and will support the inclusion of Phosagro shares in the MSCI Russia index,” Volkov said in the statement.
Bank of America Corp.’s Merrill Lynch, Citigroup Inc., Credit Suisse Group AG, Raiffeisen Bank International AG, Renaissance Capital Holdings Ltd., Sberbank CIB and VTB Capital have been appointed to manage the sale, Phosagro said.
Adorabella Ltd., Chlodwig Enterprises Ltd. and Miles Ahead Management Ltd. are selling the shares in the offering, Phosagro said yesterday. The companies represent the interests of the Guryev family, according to a February Eurobond prospectus.
Phosagro’s 2012 sales will probably reach 105.3 billion rubles, with net income at 24.5 billion rubles when Phosagro reports earnings on April 24, according to the statement.
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