Management of Uralkali gets rid of minority shareholders

Experts saw possible manipulations and violation of the rights of minority shareholders behind the repurchase of shares of Uralkali. 
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The world's largest potash company "Uralkali" instead of paying dividends to shareholders intends to purchase from them 15.97% of the securities. According to General Director Dmitry Osipov company so "Uralkali" may reimburse the holders of shares and depositary receipts (GDR) to $ 1.5 billion. Tempting offer to sell each share for $ 3.2 per GDR and $ 16 is valid until 22 May.

The decision rests with the shareholders. Experts advise to think well, calling the paper "Uralkali" one of the most promising assets in the chemical sector. In particular, it said Renaissance Capital Investment Group analysts. In early March, the bank Morgan Stanley raised its price target chemical company securities by 1.4% with an upside potential of 25%. On the forecast growth in the value of "BRIC" shares and 20% say analysts at UBS. A bank Credit Suisse said revenue growth and profitability, "Uralkali". Recently, a company with the lowest cost in the world market of potassium production, has signed contracts for large deliveries of its products to China and India. Analysts suggest that in the presentm stable financial position and good prospects, the buy-back is advantageous only to the controlling shareholders and indicate that repurchases carried out with infringement of the rights of minority shareholders to obtain reliable information.


The main interested parties in the history of the Economic Observer BY24.ORG Andrew Ashworth said owner UCC "Uralkhim" Dmitry Mazepin, which currently owns 19.99% shares of "BRIC" and his team carry out operational management of the company. Other 27.09% of the company - the group "Onexim" Mikhail Prokhorov, 12.5% ​​- in the Chinese company CIC, 12,6% - treasury. The remaining 27.82% are in free float traded on the Moscow and London stock exchanges. Thus, it is the number of private investors around the world to collectively own the largest package of "BRIC".

Dmitry Mazepin, according to Ashworth, plans to repurchase shares of the minority shareholders to "concentrate in their hands a full control over the financial flows of the potash giant." This intention, he says, explains the fCT that keeps on Mazepin "Uralkali" accounts of more than $ 2 billion., and does not pay dividends. On the Web site reported on the cash balance on the balance of $ 2.5 billion. And states that make payments to shareholders, "does not allow the company operating the dividend policy." It is not difficult to see that this policy has changed in the last year, after the operational management of "Uralkali" took over Mazepin, bought a package of its shares at the end of 2013. As a result, if the 2012 shareholders received 8.6 rubles earnings per paper, then in 2013 - already only 1.6 rubles, and now does nothing. According to analysts of Gazprombank, the trend in the rejection of the dividend payments worsens corporate governance and reduces the company's attractiveness to investors. For a company that has the lowest production costs in the industry, it is strange, says Ashworth. He suggested that before the announcement of buy-back company tried to artificially derail its own shares to the means of the company to redeem them from the minority shareholders at a dumping price.

Economic surveyedVatel BY24.ORG doubt that independent international members of the Board of "BRIC", in particular, Sergei Chemezov, which is under US sanctions and the EU in connection with the events around Ukraine, to date these plans Dmitry Mazepin. The expert believes that the policy of "BRIC" leaders may be "subject to prosecution."

Big plans

It is possible that the issue of efficiency dividends Dmitry Mazepin explained by the fact that in addition to the desire to get rid of the minority shareholders of "BRIC", he needs money for projects not related to the company. For example, in the continuation of the attack on the Samara chemical company "Togliatti" (ToAZ). The fact that the owner of "Uralhima" and "Uralkali", which is also a minority shareholder ToAZ, not the first year trying to gain control of the plant, not just the media wrote. It was noted that in addition to the media campaign against ToAZ deployed in the press, Mazepin trying to put pressure on the company's management through the initiation of criminal cases of contract. Owners and top management WhatAza he accuses of infringement of the rights of minority shareholders, Andrew Ashworth regards as "cynicism" in the background of the probable "antiminoritarnoy" started by the intrigue in Mazepin "Uralkali".

The media also reported that Mazepin has business interests not only in Russia. But, for example, in Belarus, where he came from. And in Latvia, where, according to some sources, he built a terminal for transshipment of mineral fertilizers. There are also reports that "Uralkhim" interested in developing business in Ukraine, in particular the purchase of Odessa Portside Plant (IPF), which processes and prepares to transport chemical products. This project, as written media, it can be implemented in conjunction with the Ukrainian oligarch Igor Kolomoisky.

Game for a fall

Another violation of the law by the current leadership of "BRIC" can be differentiated assessment of the shares in buy-Beck - separately for owners of large packages, separately for minorities. In particular, the media have suggested that another big majority shareholder Mikhail Prokhorov, the company canto negotiate the sale of its stake at a price significantly differs from the price of the public offer made to the shareholders in the buy-back procedure. That he is in talks with the owner of "Uralhima" does not exclude the experts on the M & A market.

In favor of the version of the managed collapse of quotations shows the abundance of which spread in recent years of negative information about "Uralkali". It is known that stock price movements controlled news on the stock market: if the poor more rapidly cheaper paper. Experts point out that in early March, holding a conference call for investors, representatives of "BRIC" too exaggerated, remembering about the crisis, and devaluation of the currency, and that it is not known whether the company will pay dividends. At the same time work on "Solikamsk-2" emergency restoration of the mine, according to the company's top managers, supposedly, could lead to flooding "Solikamsk-1" adjacent to the mine, which is the main producing asset of the company.

The real situation in the field of mining of potassium, said Ashworth, saysthe management of "BRIC" is likely to distort the true picture. The consequences of the accident were not fatalnymi- mine continues to operate and the total volume of produced potassium approached the pre-crash. Mazepin, however, he said, demanded that "their PR activity of" merging "the press" negative information about the company. " After that, the media and there were publications about the failures in the mines, on the death of an employee "Uralkali" and even of tax audits in the company. Characteristically, the company owned Mazepin "Uralkhim" declined during the buy-Beck sell its shares of "BRIC". It is, apparently, do not confuse "problems" potash giants.

At the same time "in the Moscow financial and legal circles" rumors Ashworth told that "Uralkali" in general can get away with the London Stock Exchange. In this case, analysts say the company BCS, the free float will be less than a quarter of depositary receipts of the company, which only increase the investment risks for minority shareholders chemical company.

If it is proved that anal quotations comes under someone's guidance of, the western law this fact is regarded as the intentional introduction of investors misleading and manipulation of stocks. In 2009, criminal liability for the use of insider information and market manipulation was introduced in Russia.