Potash producers rally on Uralkali stake sale report
A large stake in Russian potash producer Uralkali OAO is likely to be sold to one of several local bidders, according to a report in the Wall Street Journal on Wednesday.
The report, which cited unnamed people close to the discussions, also said the Kremlin is eager to repair a rift with Belarus that led to the collapse in July of the Belarusian Potash Company (BPC), and wants some kind of sales co-operation with Belarus, after a steady slide in prices of the crop nutrient potash.
Uralkali officials could not immediately be reached to comment on the report.
Shares of North American potash producers rallied after the article was published, with Mosaic Co rising 3.4 percent in New York by mid-afternoon. Potash Corp of Saskatchewan and Agrium Inc were up 2.9 and 1.6 percent respectively in Toronto.
However, there are no buyers close to doing the deal as of now, several sources familiar with the situation told Reuters this week.
“I can’t see the buyer now,” one of them said.
BPC and North America’s Canpotex Ltd controlled nearly 70 percent of globally traded potash, and their producers typically managed supplies to support price. Uralkali, the world’s biggest producer, said however when it left BPC that it planned to pursue higher sales volumes.
Uralkali CEO Vladislav Baumgertner was detained while visiting Belarus on Aug. 26, about a month after Uralkali withdrew from the BPC marketing alliance with state-owned miner Belaruskali, an important source of income for Belarus.
Baumgertner was held in a KGB prison in Minsk until he was moved to house arrest last week, and could face up to 10 years in jail on charges of abuse of office.