The share price of Israel Chemicals Ltd. (TASE: ICL) is rebounding today, after "The Wall Street Journal" reported that a large stake in Russian potash giant Uralkali (LSE: URKA) is likely to be sold to a Russian investor. Israel Chemicals' share rose 0.9% by mid-afternoon, reversing yesterday's drop, to NIS 29.75.
"The Wall Street Journal" quotes sources as saying that the Kremlin was eager to repair a rift with Belarus that led to the collapse of the potash cartel and the arrest in Minsk in August of Uralkali's CEO Vladislav Baumgertner on charges of abuse of office that the company has dismissed as political.
"The Wall Street Journal" says, "China Investment Corp., Beijing's sovereign-wealth fund, took a 12.5% stake in Uralkali last month by exercising an option to convert bonds it had purchased. The move gives China, one of the world's largest consumers of potash, a seat on Uralkali's board. People close to the talks said Beijing had sought to increase its holding to 25%, but was rebuffed by Russian officials. National governments have typically defended against foreign ownership of potash producers."
The paper added, "The people said the Kremlin has made clear to potential bidders that some kind of sales cooperation with Belarus - a close ally of Moscow that depends heavily on potash for export revenues - should be restored after any deal. In July, Uralkali said it would no longer seek to maintain high prices by limiting production, shifting instead to a strategy aimed at boosting volume in a push to win market share. The change hammered the share prices of potash producers around the world."
Published by Globes [online], Israel business news - www.globes-online.com - on October 3, 2013
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