Grodno Azot to be sold to Russian oligarch

• 5.04.2013, 9:42

Selling the company is compensation for “solvent” smuggling demanded by Russia.

Belarusian state concern Belneftekhim is ready to sell the controlling interest in Grodno Azot joint-stock company to a Russian company. The most possible buyer is EuroChem owned by oligarch Andrey Melnichenko, Izvestia newspaper reports.

This conclusion can be made from a letter of Belarusian PM Mikhail Myasnikovich to Russian PM Dmitry Medvedev. Belarusians would like to organise a tender for several bidders. The investor is expected to assume obligations on constructing a new nitrogen unit and supplying cheap natural gas to the enterprise.

The Russian side has long ago been insisting on buying the Belarusian enterprise.

Grodno Azot is a Belarusian monopoly producer of nitrogen products. The enterprise produces fertilisers, liquid ammonia for technical use, biodiesel, chemical fiber, etc. About 50% of products are exported.

EuroChem, Russia's largest mineral fertiliser producer, is ranked among the top ten global players. EuroChem's main products are nitrogen and phosphate fertilisers and iron ore concentrate. A 99.9% stake in EuroChem belongs to Cyprus-based company MCC Holding Limited, a 95% stake of which is owned by Andrey Melnichenko, the chairman of EuroChem's board of directors, and a 5% stake is owned by EuroChem CEO Dmitry Sterzhnev.

Representatives of Grodno Azot have not replied to a request of the Russian newspaper. EuroChem declined to comment saying they have not received official proposals on a deal.