Traders are dumped into the bins of the motherland – Newspaper Kommersant No. 228 (7429) of 12/08/2022
[ad_1]
The business of global grain traders operating in Russia is of great interest to local players. As it became known to Kommersant, Uralchem, a major supplier of fertilizers, notified Vladimir Putin of its readiness to buy out the assets of Cargill and Viterra and asked for consent to the government commission’s deals. However, both companies do not intend to leave Russia and are not negotiating the sale. In such circumstances, lawyers believe, it is difficult to obtain consent to transactions.
Major fertilizer producer Uralchem is interested in acquiring the Russian assets of global grain traders Cargill and Viterra (formerly Glencore Agriculture). This was announced by the General Director of “Uralchem” Dmitry Konyaev in a letter to Russian President Vladimir Putin dated November 21. Kommersant has a copy of the appeal. According to Mr. Konyaev, Cargill and Viterra allegedly intend to stop working in the Russian Federation in 2023, and their activities in the grain trade, including export, largely overlap with the business of Uralchem. For grain shipments, the same ports are used as for fertilizers, and ships of a similar type are used for transportation, the appeal says.
Dmitry Konyaev writes that the issue was previously discussed and agreed with the Ministry of Agriculture. He asks Vladimir Putin to support the proposal and instruct the government commission for foreign investment control to issue permits to Uralchem. On November 22, Vladimir Putin signed a letter to Prime Minister Mikhail Mishustin, indicating “I agree.” A Kommersant source in the government confirmed that the issue is being worked out. Uralchem declined to comment. Kommersant sent questions to the presidential press secretary, Dmitry Peskov, to the press service of the government and the Ministry of Agriculture.
Viterra and Cargill are among the largest exporters of Russian grain. Viterra, together with Demetra-Holding (45% owned by VTB), operates a terminal in the port of Taman with a capacity of 5 million tons of grain per year, and also owns a terminal in Rostov-on-Don with a capacity of 1.5 million tons per year. Cargill owns a stake in the KSK terminal in Novorossiysk with a capacity of 6 million tons per year, as well as an enterprise for the production of feed ingredients, starch and molasses products.
Viterra and Cargill refute the information about the intention to stop working in Russia. Cargill, in a letter to the Ministry of Agriculture dated December 6, which Kommersant also read, said that they were working as usual, and there were no plans for leaving and negotiations on the sale of assets.
Nikolay Demyanov, Managing Director of Viterra Rus, said that the company adheres to the previously expressed position regarding the importance of ensuring food security in the world, continues to export from Russia and does not intend to sell assets. Eduard Zernin, Chairman of the Board of the Union of Grain Exporters, also says that the companies do not plan to leave the Russian market, which is also confirmed by the good operating results of the first half of the season.
Uralchem’s address is not the first attempt to draw Vladimir Putin’s attention to the work of global agricultural traders. At the end of September, the head of VTB Andrey Kostin proposed to the President of the Russian Federation to ban companies from “unfriendly countries” from buying and reselling grain, including for export, as well as owning transshipment and storage facilities. In early December, the head of the Ministry of Agriculture, Dmitry Patrushev, commenting on the initiative, said that the Russian Federation did not intend to “kick out” international grain traders.
Andrey Sizov, director of Sovecon, notes that Uralchem’s influence has probably grown significantly in recent years, recalling that the issue of resuming the transit of Russian ammonia through the Togliatti-Odessa pipeline, which is controlled by Uralchem’s structures, was one of the key issues for the Russian Federation under discussing the extension of the grain deal. The topic was also discussed at a meeting between Vladimir Putin and the founder of Uralchem, Dmitry Mazepin, on November 23.
Sources of Kommersant admit that Uralchem may need permission for the deal in case negotiations are still possible. Anna Mitroshkina, head of the M&A transaction coordination department at Kulik & Partners Law.Economics, says that the seller’s consent is not required to obtain permission, but the applicant needs access to information from the seller. Ksenia Petrovets, senior lawyer at Birch Legal, agrees that without at least preliminary agreements with the seller, it is impossible to collect a complete package of documents to resolve the transaction.
A Kommersant source in the grain market notes that the purchase of assets of global grain traders against their will may lead to new difficulties with the export of grain from the Russian Federation, while the situation with ship charter and payments has only just begun to improve. In addition, negotiations on transit through the Togliatti-Odessa pipeline and the lifting of sanctions against Rosselkhozbank may be suspended, he adds.
[ad_2]
Source link
