UPDATE 4-China gets stake in Russian potash giant to secure supply

Tue Sep 24, 2013 11:50am EDT
 
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* China's CIC acquires 12.5 percent stake in Uralkali

* Stake worth $2 billion after bond exchange

* Major consumer now represented as shareholder

* Russia, Belarus seek to revive sales alliance

By Polina Devitt and Ron Bousso

MOSCOW/LONDON, Sept 24 (Reuters) - China acquired a 12.5 percent stake in Russian potash producer Uralkali in a deal that could help Beijing secure stable supplies of the soil nutrient, put new pressure on prices and reduce the chances of a Russia-Belarus cartel being revived.

The investment by China's $575 billion sovereign wealth fund China Investment Corp (CIC) is the latest twist in a saga that began when the world's leading potash producer quit the lucrative sales partnership with Belarus in July and led to the company's chief executive being jailed.

Under the deal, Uralkali said on Tuesday that CIC had received the stake in a bond exchange deal with Wadge Holdings Ltd, which belongs to three shareholders including oligarch Suleiman Kerimov.

The deal is a rare example of China, the world's largest consumer of potash, acquiring direct ownership of Russian natural resource assets, although it is only the latest in a series of commodity-related investments by CIC.   Continued...