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. Last Updated: 07/27/2016

Uralkali Offer Raises $950M

VedomostiRybolovlev, who pulled a sale last year, is cashing in on high fertilizer prices.
Billionaire Dmitry Rybolovlev on Friday raised $948 million by selling 12.75 percent of potash maker Uralkali as investor demand spurred him to increase the size of the offering.

Uralkali sold 270.8 million shares at $3.50 each, the company said in an e-mailed statement Friday.

Rybolovlev, who canceled a share sale last year because he didn't get the price he wanted, had planned to offer 10 percent of the stock. He retains more than 65 percent of the fertilizer company, equivalent to about $6 billion.

"The potash story has its own unique fundamentals and is relatively immune to global credit concerns," Mikhail Stiskin, an analyst at Troika Dialog, said in an e-mail.

Wheat and soybeans have been two of the biggest gainers in commodity prices this year.

As prices rise, farmers worldwide are sowing more seeds and will harvest at least 3.3 percent more hectares next year than they did this year, said William Tierney, a former U.S. Department of Agriculture economist.

The market for potassium-based fertilizers made by Uralkali will grow about 4 percent per year, according to Renaissance Capital, which handled the offering with UBS and Citigroup.

Ukralkali sold at the top of its $2.80 to $3.50 price range as investors sought more than five times the number of shares on offer, two people familiar with the transaction said Thursday.

"The offer price reflects the overwhelming response of investors to the offering of Uralkali and marks the beginning of the next chapter in the company's history," chief executive Vladislav Baumgertner said in a statement Friday.

Uralkali will slash 2,500 jobs over the next three years, or about 30 percent of the work force, Renaissance said in a report prepared for the sale.

The stock, which was as low as 5 cents five years ago, has more than doubled this year. It rose 26 cents, or 6.5 percent, to a record $4.25 on the RTS index Friday, valuing the company at $9 billion.