A four-year, US$65mn loan from the European Bank for Reconstruction and Development (EBRD) will allow Russia’s biggest producer of potassium fertilisers to acquire full control of the maritime terminal through which the company ships the bulk of its sea-bound exports.
The EBRD remains lender of record for the full amount, but US$30.5mn has been syndicated to three commercial banks and one fund management firm under an EBRD A/B loan structure, with RZB-Austria and WestLB acting as arrangers and taking US$10mn each.
A further US$5.5mn was syndicated to Cordiant and the remaining US$5mn to Raiffeisenlandesbank Niedersterreich-Wien.
Cordiant, formerly International Finance Participation Trust Management, is a fund management firm specialising in private sector investments in emerging markets.
The four-year loan will enable Uralkaly to establish full ownership over the Baltic Bulk Terminal, a state-of- the-art transshipment and storage facility for mineral fertilisers near St Petersburg whose construction was aimed at cutting the company’s transportation costs. The terminal, which will have a capacity of 5.5mn tonnes, is nearing completion.
The proposed consolidation of the Baltic Bulk Terminal by Uralkaly will enhance its ability to provide a high-quality service to international customers, says Victor Pastor, director of the EBRD’s Russia team.
This is the EBRD’s second loan to Uralkaly. In 2003, the bank made a seven-year loan of US$75mn to finance acquisition of the company’s own power generators, specialised railcars to transport potassium fertiliser and mining equipment, US$50mn of which was syndicated to five commercial banks.
Uralkaly is located in the city of Berezniki, some 1,200km to the east of Moscow in the northern Urals. It is the world’s fourth largest producer of potash and operates three mines and four potassium rock enrichment facilities, employing in all 16,000 people.
The company exports some 85% of its production, mainly to China, India and Brazil. The growing demand for fertilisers, particularly in China and India where they are needed for the cultivation of soya, is one of the main forces driving the international market for potash.