OREANDA-NEWS. Fitch Ratings says there is no immediate rating impact on Russian potash player Uralkali (BB-/Stable) from its new shareholder structure.

ONEXIM officially announced the sale of its 20% equity stake in Uralkali to Belorussian businessman Mr. Lobyak on 8 July 2016. Uralkali's other shareholders are OJSC Uralchem (controlled by Mr. Mazepin) which controls around 20%, and 8% free float. The remaining equity is quasi-treasury shares bought back by Uralkali to date. Since Uralchem and ONEXIM's acquisition of Uralkali's stakes in 4Q13 the company's board and top management has effectively been controlled by Mr. Mazepin.

The multi-billion US dollar transaction has not impacted Uralkali's balance sheet, which has limited room for sizeable shareholder distributions under our rating guidelines and bank covenants. We are not aware of Mr. Lobyak's other cash-generative businesses that could fully fund the deal, and therefore do not exclude the possibility of the transaction eventually being funded by Uralkali's shareholder distributions over the next years. However, our current expectations incorporate around USD0.5bn shareholder distributions in 2017 and beyond, which in our opinion adequately represents such a risk over the coming years. This is also based on our assurance that Uralkali remains committed to fulfilling the leverage covenants under its banking debt.

Mr. Mazepin owns 20% of Uralkali but exercises full board and management control. We do not expect the new 20% shareholder to significantly change Uralkali's financial, dividend or M&A policy in a way that would negatively affect its current ratings. Fitch will continue to monitor any strategic changes in the company.