RUSSIA! Magazine : Uralkali Minority Shareholders May Form an Association

NEW YORK, July 9, 2015 /PRNewswire/ --

Minority shareholders of Uralkali (URKA - LI, MICEX), a major global producer of potash and fertilizers based in Russia, may form an association and possibly block the company's plans to delist its stock and subsequently merge with Dmitry Mazepin's Uralchem, a private chemicals and fertilizers conglomerate, writes RUSSIA!, a magazine that covers Russian business and culture, in its exclusive report.

The information about delisting was first reported by Vedomosti, the leading Russian business daily on June 21.  Over the past four months, URKA management has been making efforts to buy back stock from minority shareholders. So far, buyback is short of the target (with 11.6% bought back out of nearly 16% planned in the first round).

According to RUSSIA! Magazine report, Uralkali management's guidance might have downplayed the company's strengths and emphasized Uralkali's weaknesses, notably recent flooding at its key mine. This was one of the reasons for the company's recent decision first to reduce dividends. However, URKA is a profitable and financially stable company with some of the lowest production costs in the industry, well-positioned to weather almost any storm.

The recent developments and this seeming discrepancy between the management's guidance and experts' opinion on Uralkali indicate that minority shareholders would benefit from concerted action to make sure their interests are protected in a likely stock buyout and they get a fair price. The best way to achieve this would be by forming a shareholders' association.

Under the Russian law, shareholders in control of 5% or more shares in a public company can block any corporate action, including a stock buyout, if it runs against their best interest. "Given the likely plans for a merger of Uralkali and Uralchem, it is essential to get an accurate and fair valuation of both companies, and minorities should be able to be part of the valuation process," said Anatoly Skurov, a leading expert in potash mining who holds 1.5% stake in Uralkali among other holdings.

The full story on Uralkali can be found at http://www.readrussia.com. RUSSIA! Magazine offers the most original coverage of ideas and trends that shape Russia and the world.