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Uralkaliy's Buyback
August 23, 2015 12:09


On 24 August the Council of Directors of “Uralkaliy” will consider the resolution of the management concerning the listing on the London Stock Exchange (LSE) which was deemed inappropriate by the company’s leadership.

As the sources told to the media, the company’s readiness to hold another buyback (the first one was held in April) can be explained by the fact that many shareholders bought securities of “Uralkaliy” reckoning on high dividends, but now, after the November accident at the mine that used to give 20 percent of production, no payments can be expected in the near future.

The sources did not specify the amount that could be spent by the company on buyback. If the shareholders sell a 10 percent of shares to the company, it will lead to its automatic delisting from the LSE, for this would violate the requirements of the stock exchange that at least 25 percent of GDR (global depository receipts) issued by the company should stay in circulation. As the analyst of Raiffeisenbank Konstantin Yuminov thinks, “Uralkaliy” can afford to spend a maximum of one billion dollars on buyback. In this case the company’s debt burden will grow to 3 EBITDA – this level is high, but still valid for the company, taking into account the continuing devaluation of the rouble.

The company has recently attracted a syndicated loan of 655 million dollars (the amount may be increased to $ 800 million). In April “Uralkaliy” bought a 11.56 percent stake from shareholders. Before that the company reported that more than 25 percent of GDR had been in circulation. They did not report the way this amount changed after the purchase.

The amount reserved for the previous buyback has not been completely used. In April the company was ready to spend $ 1.5 billion on the purchase of 15.97 percent of shares, but managed to buy 11.56 percent for $ 1.1 billion, 7 percent of them being offered by “Onexim” (one of the main shareholders of the company with a 20 percent stake).


Author: Anna Dorozhkina

Tags: Uralkaliy     

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