Uralkali might return to buybacks, dividends after debt debt/EBITDA falls to 4x
MOSCOW. May 17 (Interfax) - Uralkali might return to share buyback or dividends as a means of compensating shareholders after leverage falls to a net debt/EBITDA ratio of 4x, the potash miner's management said at a meeting with analysts and investors on Wednesday.
Several of those present at the meeting told Interfax that this restriction was determined by covenants on company loans. Uralkali expects leverage to fall to 4x by the end of the year as potash prices recover.
The 4x net debt/EBITDA restriction from 2018 is a condition of agreements with lenders, an Interfax source said.
At the end of 2016, net debt/EBITDA was 4.7x. Uralkali agreed with its main lenders on extending covenants to net debt/EBITDA to 5x.
Management did not pledge to resume buybacks or dividend payments as early as next year, but just pointed out the corresponding restrictions and assured investors that it would not be using the proceeds from a planned ruble-bond offering to buy back shares, meeting participants said.
Management said the company had a fairly flexible investment program, which could be adjusted depending on leverage.
Uralkali needs to repay nearly $2 billion to creditors this year, including $250 million that it prepaid to Promsvyazbank. Maturities peak at $2.5 billion in 2018, falling to $2.2 billion in 2019. The debt is secured by Sberbank credit facilities of $3.9 billion, available in for drawdown in 2017-2020, and $750 million arranged this year and available for three years.
