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Uralkali head says Kerimov sale won’t result in excessive leverage

CFO and acting CEO Viktor Belyakov defends his firm’s strategy amid one of Russia’s biggest corporate dramas this year.

London-listed Russian potash firm Uralkali won’t be saddled with crippling debt levels if billionaire Suleiman Kerimov sells his 21.75% stake, says CFO and acting CEO Viktor Belyakov.

Belarus’s president Alexander Lukashenko is pushing for a change in the main shareholder at Uralkali, the world’s largest potash producer, after Uralkali in July exited a marketing consortium with fellow potash producer Belaruskali, which is owned by the government of Belarus. 

Various Russian names have been mooted as bidders, including Vladimir Evtushenkov – the billionaire owner of Russian conglomerate Sistema – who has said he is interested in Uralkali.

Uralkali's CFO and acting CEO Viktor Belyakov

However, Belyakov says Uralkali will not head the way of other Russian resources firms, some of which have taken on too much debt after oligarchs leveraged up to buy controlling stakes.

“I’m sure [the board] will not vote for such leveraging of the company in favour of the big shareholders,” he says. “I don’t think there is such a risk. We have an effective board and independent directors.”

Belyakov says Uralkali is not on the Russian government’s list of strategic assets, in which it needs to maintain control. Still, he casts doubt on the possibility of a foreign player coming in to buy the stake.

“It’s a big company, and one of the priorities in Russia is to strengthen agricultural businesses in general,” he says.

Uralkali, previously one of the bright spots in the Russian corporate world, has come to be another headache for investors after the firm exited its consortium with Belaruskali.

Shortly after pulling out, Uralkali’s CEO Vladislav Baumgertner was arrested in Belarus, accused of abuse of office. Uralkali later released a statement rejecting the allegations against its employees, saying it was "politically motivated".

Belyakov says the firm has high standards of transparency and corporate governance. He also says the latest scandal is not another case of majority shareholders overlooking minorities’ concerns in Russia.

Investors understand a strategy of building market share, rather than focusing on controlling prices, he says, adding: “Our strategy was rational and timely.” He now expects potash prices to rise next year.

Nevertheless, he says it is too early to discuss restoring relations with Belaruskali, and a new marketing consortium will be dependent on the supply-demand balance, competition and the Belarusians’ decisions.

Asked about the effect of the CEO’s arrest on the running of the firm, Belyakov says there are no operational problems as a result. “Vladislav built a very effective management team, with a high level of specialization,” he says.

“For me personally it’s not easy, taking on a dual role not just covering financials and economics but also general management. It’s very time consuming – interesting, but not easy.”

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