Page 126 - RusRPTFeb19

and investors associated with the businessman will have to transfer the right to vote to an “independent third party.” On January 16, the US House of Representatives approved a Democratic resolution calling on the Treasury to halt lifting sanctions against Deripaska’s companies. However, this decision was symbolic, since to enter into force the decision also needs approval by the Senate, which was not forthcoming. Earlier, Republican controlled Congress blocked the resolution.
9.2.11 Metallurgy & mining corporate news
● Fertiliser
Russia's largest bank state-controlled Sberbank acquired 10% in fertiliser major Uralkali from Belarus businessman Dmitry Lobyak, a partner of the largest shareholder in the company Dmitri Mazepin, Vedomosti daily reports. The amount of the deal is undisclosed but is estimated by the daily at RUB25.7bn ($385mn). This week Mazepin said that Uralkali and another fertiliser major Uralchem are toying with the idea of listing on foreign exchanges in the future to lower the debt of the companies. Unnamed sources told Vedomosti that most likely the deal is an internal dealings of Lobyak and Sberbank as back in 2016 Lobyak acquired 19.9% stake in the company from billionaire Mikhail Prokhorov on Sberbank's financing. The bank is one the largest creditors of the company with $3.9bn credit line granted in 2016 against 28.6% of Uralkali's GDRs as collateral. As of end of 2017 net debt of Uralkali stood at $5.37bn with net debt to Ebitda ratio of 4.01x.
Russian fertiliser major Phosagro could increase the output of phosphate fertilisers at one of its facilities Metachim from 0.15mn tonnes to 1mn tonnes, VTB Capital wrote following the meeting with the management on December 6. The investment of RUB25bn ($376mn) in the project would boost the output of the company by about 10%. In 2017 the company made 6.6mn of fertilisers. The project will make a lion's share of Phosagro's investment spending of RUB30bn from 2019 to 2021. Sources of Vedomosti daily say Phosagro wants to boost output of high-value added phosphate products as the new development strategy. The daily also reminds that Fitch Ratings forecasted the price increase in this segment by 2022. Phosagro reported 5% quarter-on-quarter and 18% year-on-year revenue growth to $957mn in the third quarter of 2018, supported by strong fertiliser prices beating consensus expectations for top line by 2%. In the first quarter Phosagro missed expectations, but in the second quarter company's Ebitda jumped 31% q/q to RUB18.7bn beating consensus expectations by 7%. Strong Ebitda growth continued in the third quarter with 57% y/y jump to $357mn, Ebitda margin gaining 9pp y/y and 4pp q/q to 37%. In March 2018 bne IntelliNews interviewed the head of Phosagro Andrei Guryev. The company has been on a tear, and is a favourite of both portfolio and bond investors. It is cash rich, has low debt and grows at a steady 10% a year irrespective of the shockwaves that have bombarded Russia in recent years.
● Gold
Highland Gold reserves increase 70% after a revaluation. Russian gold miner Highland Gold completed a revaluation of its assets that showed the deposits of its largest and oldestmnogovershinnoe reserves increased by 70.4% according to the JORC classification. Russian oligarch Roman Abramovich and partners control 43.8% of the company’s shares and the
126 RUSSIA Country Report February 2019 www.intellinews.com