EuroChem flotation on horizon

EuroChem co-owner Andrei Melnichenko has clarified a timeframe for the EuroChem IPO.

­“We plan an IPO for the end of 2013 or beginning of 2014,” he announced.
Preliminary estimates were not mentioned, while Melnichenko noted that the company needs to complete construction of its potash mines prior to an IPO.

“The market will provide the estimate. We still haven’t made any appraisals. It will be time for us to get ready for the IPO after the construction of the potash complex,”
Melnichenko said.

Along with IPO preparations EuroChem is in the process of purchasing an ammonium nitrate plant in Antwerp from Germany’s BASF. Andrei Melnichenko said the companies are finishing negotiations on the value of the deal.

“Right now the negotiations are in their final stage with results of the talks unveiled during the next week. We look forward to finalizing the deal during the last week of September.”  

EuroChem accounted for 3% of Europe’s nitrate market and 8.6% of its phosphate market, according to company reports. The purchase of the Antwerp plant will enable EuroChem to increase its share in the EU nitrate segment to 10%.

Pavel Emelyantsev, analyst at Investkafe, says EuroChem’s shares should become available for public purchase, but estimates as to the time frame needed to be firmed up.  
“EuroChem has reported $3.2 billion (97.8 billion roubles) revenue in 2010, which is more than the combined total revenue of Uralkali and Silvinit. In this case it is the only company of the major domestic players, whose shares are not traded on the stock exchange given that Uralkali, FosAgro and Akron are already trading their shares on the foreign stocks. EuroChem’s listing is definitely a positive move, provided that the time frame for listing has a reasonable postponement for price stabilization and better market conditions which seem to be rather volatile in the current situation. The company can get an adequate assessment if it remains patient and prudent as it is.”

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