UralChem buying 20% of Uralkali with loan monies secured by shares
MOSCOW. Dec 4 (Interfax) - UralChem is buying 20% of Uralkali using loans secured by the shares being acquired, UralChem CEO Dmitry Konyaev said during a press conference.
"The money will be raised using the Uralkali shares as collateral; a portion will be raised using UralChem [assets]," Konyaev said.
The creditor is a major Russian bank and the borrower - OJSC UCC UralChem, he said.
The stake is valued with a premium to market. The deal is expected to be concluded in the near future, Konyaev said, adding that it took two-three months to put the deal together.
UralChem will pay cash for the shares, which it will acquire on the open market, along with the stakes held by companies belonging to Filaret Galchev and Anatoly Skurov.
UralChem has examined various M&A deals since the company substantially reduced its debt burden, he said. It is purchasing the Uralkali stake because it sees opportunities to grow the company further and boost capitalization. "We understand how the market works and have the competencies to develop the company. We are counting on constructive cooperation with Uralkali's management and its other shareholders," Konyaev said.
"In the context of UralChem's deal, there can be no talk of a partnership with [Mikhail Prokhorov's] Onexim Group. These were unrelated decisions. Our cooperation with Onexim and with the other shareholders will be built within the framework of the board of directors," he said.
UralChem expects to raise its own profitability through increases in the Uralkali stake's value and receipt of dividends.
"Uralkali has a rational dividend policy that meets the interests of shareholders," he said.
Reports that UralChem had reached agreement to purchase 20% of shares in Uralkali appeared on Monday. The stake is worth $2.9 billion, based on Uralkali's capitalization using quotes from the London Stock Exchange on Monday.
UralChem's debt/EBITDA ratio equaled 1 as of the end of 2012. It was 1.2 at the end of 2011 and over 4 the year before that.
