UPDATE 2-Russia's Uralkali says may do a deal with Belaruskali

Fri Jun 10, 2011 4:51pm BST

Quotes

   

* Uralkali says "considering transaction" for Belarus firm

* Says may lend its trading partner $1 billion

* Russian tycoon said to be seeking 50 pct stake for $15 bln

* Sale of potash producer would greatly ease currency crisis

(Adds Uralkali statement, background)

By Andrei Makhovsky

MINSK, June 10 (Reuters) - Russian potash miner Uralkali said it is considering doing a deal with the state-owned Belarussian fertiliser firm Belaruskali, which has been valued by Belarus president Alexander Lukashenko at $30 billion.

Uralkali said in a statement it was "considering entering into a transaction with Belaruskali", and may lend its trading partner $1 billion as part of any deal.

Uralkali and Belaruskali, which between them control 40 percent of global potash trade, are already partners in the export vehicle Belarusian Potash Company (BPC).

"The Uralkali Group has not yet entered into any binding agreement, and no assurance can be made that the transaction will be completed on these terms or at all," it said.

A spokesman declined to comment further.

On Wednesday a source familiar with the situation said that Nafta Moscow, the investment vehicle of Russian tycoon and Uralkali's (URKA.MM) main shareholder Suleiman Kerimov, was in talks to buy a 50 percent plus one share stake in Belaruskali for $15 billion. [ID:nLDE75722R]

But sources in Moscow quoted by Vedomosti newspaper said on Friday that although Lukashenko and Kerimov have discussed the sale of Belaruskali, which would help resolve a financial crisis gripping Belarus, they differ over its valuation.

ON THE TABLE

And Lukashenko, quoted by local Belarussian agencies, denied on Friday that he had been in talks.

"Rumours are going round that this firm is already sold (but) I have not had talks about the sale of Belaruskali with anyone," he was quoted as telling a government meeting.

"If you have the money, then come. I have said quite clearly -- $30 billion on the table. If you have that sort of money then tomorrow you are the owners of this firm.

Analysts say demand for potash is set to rise as the world grapples with food shortages, making it a hot commodity for miners and investors alike.

Belaruskali has long been seen as the state's most lucrative asset, but Lukashenko said in January before the currency crisis began to bite that no more than 25 percent of the company would be offered for sale.

The crisis, which threatens to undermine confidence in Lukashenko's leadership of the ex-Soviet republic which he has ruled since 1994, has brought a 36 percent devaluation in the Belarussian rouble and led to a chronic shortage of imported goods in shops.

Belarus has received a $3 billion bailout loan from a Russia-led regional fund but still needs more support and has turned to the International Monetary Fund (IMF) for further financial assistance.

Both Russia and the IMF have urged Belarus to privatise assets to raise revenue and reform its Soviet-style economy, where 70 percent of output comes from the state sector.

Belarus meanwhile said it would pay an oustanding electricity bill of $50 million to Russian state provider Inter RAO IUES.MM to ensure continued power supplies.

An Inter RAO source said on Thursday that it had halved power supplies to Belarus because of non-payment of the bill and threatened to cut off supplies entirely if Minsk did not pay up.

But Belarussian Energy Ministry spokeswoman Ludmila Zenkovich told Reuters on Friday the bill would be settled by July 1, meaning full supplies could resume on June 13. (Reporting by Andrei Makhovsky; Writing by Richard Balmforth in Kiev and John Bowker in Moscow; Editing by Greg Mahlich)