Prokhorov Exits Uralkali Stake as Co-Owner Strengthens Hand

  • Co-Owner Uralchem says Belarusian businessman bought stake
  • Prokhorov has been looking to exit assets despite low prices

Mikhail Prokhorov’s Onexim Group sold its 20 percent stake in Uralkali PJSC to a business associate of co-owner Dmitry Mazepin, strengthening his hold over the world’s biggest producer of potash.

Belarusian businessman Dmitry Lobyak is buying the stake, Mazepin’s Uralchem JSC said in a statement, citing a long-standing supply partnership with him. Uralchem,  Russia’s second-largest ammonia- and nitrogen-fertilizer maker, holds about 20 percent of Uralkali.

Neither Uralchem nor Onexim’s press services disclosed the price. The Uralkali stake had a market value of almost 107 billion rubles ($1.7 billion) based on the closing price in Moscow, compared with about $3.5 billion when he agreed to buy shares in 2013.

Onexim has also been looking at selling assets, including Uralkali, aluminum producer United Co. Rusal, power utility Quadra and property developer Opin PJSC. Vedomosti newspaper reported earlier this month that Onexim plans to sell all its assets in Russia after the Federal Security Service searched offices of Onexim and some units in April.

Belarus Breakup

The raids came as state media criticized Prokhorov’s RBC media holding for its coverage of offshore transactions involving President Vladimir Putin’s friends in the Panama papers. RBC’s flagship newspaper also published investigative reports into Putin’s daughter and son-in-law. As pressure mounted, top editors left in May.

Uralchem and Onexim bought their stakes in Uralkali from billionaire Suleiman Kerimov and other investors almost three years ago after the potash producer ended a sales joint venture with Belarus, that had controlled 40 percent of global exports. The breakup threw the world potash market into turmoil, causing prices to crash. Potash prices are still around the lowest levels since 2007.

Belarus President Alexander Lukashenko said June 23 that his country, one of the world’s biggest producers of the soil nutrient, isn’t against reviving the trading venture.

“The sale of a stake in Uralkali to entities close to Mazepin increase the likelihood of a trade agreement” with Belarus, Denis Vorchik, an analyst at UralSib Financial Corp., said.

The company delisted from the London Stock Exchange in December and is heading toward an exit from the Moscow Exchange after cutting its free float to 8.96 percent in a series of buybacks and announcing a repurchase program in May that seeks to buy 4 percent. 

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