Uralkali approves new buyback, makes step towards delisting from Moscow Exchange
MOSCOW. May 19 (Interfax) - Directors at Uralkali have approved an open market buyback program in respect of ordinary shares and Global Depositary Receipts (GDRs) in the amount of up to 4% of charter capital, the potash miner said in a statement.
The company could buy back up to 4% of its shares between May 19 and September 19, 2016, if the timeframe of its validity is not extended or if it is not ended ahead of time.
The price of the company's shares on the Moscow Exchange rose nearly 4.5% on the news to 173.35 rubles per share. This is the highest point since the start of the year.
Based on the current capitalization, the cost of the 4% stake in Uralkali is estimated at 20.3 billion rubles or about $310 million.
The purchase of shares as part of the confirmed program may be carried out on the Moscow Exchange and on the open market, in particular as part of private deals, including option agreements. The purchase of GDR may be carried out as part of private deals and option agreements. Renaissance Capital will carry out the buyback.
It is the company's intention ultimately to cancel the securities acquired in the program.
"The purchasers do not intend to acquire, alone or together with their affiliates, more than 30% of the shares as a result of the program and, therefore, will not be required to make a mandatory tender offer for the shares under Russian law," the press release said.
The implementation of this program is the next step of Uralkali shareholders on the way to making the company private. After the buyback Uralkali's free float may fall below 5%. Uralkali's free float is currently 8.96%.
