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CIC acquires 12.5 pct stake in Russian potash giant

2013-09-25 08:26 Global Times Web Editor: qindexing

China, the world's largest consumer of potash, has acquired a 12.5 percent stake in Russia's Uralkali, the world's largest producer of the soil nutrient, via its sovereign wealth fund, Uralkali said Tuesday.

The deal, a rare example of China acquiring direct ownership of Russian natural resource assets, was conducted amid speculation that tycoon Suleiman Kerimov might sell his large stake in Uralkali over a dispute between Russia and Belarus.

Chinese sovereign wealth fund China Investment Corp (CIC) received the stake in

Uralkali - now worth about $2 billion - in a bond exchange deal with Wadge Holdings Ltd.

Wadge sold the exchangeable bonds to Chengdong Investment Corporation, a subsidiary of CIC, last November. The bonds were due in 2014.

Uralkali sent the $20 billion global potash market into turmoil when it quit a marketing alliance with state-owned Belaruskali in July. The government of Belarus hit back by arresting Uralkali CEO Vladislav Baumgertner on August 26.

Belarus would like to revive the sales alliance, which controlled two-fifths of the world market, but with China on board as a shareholder it may become harder in future to curb sales volumes to underpin contract prices.

Kerimov's foundation owns 21.75 percent of Uralkali. His partners, Filaret Galtchev and Anatoly Skurov, own 7 percent and 4.8 percent, respectively.

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