OREANDA-NEWS. August 3, 2011. Yara today (3 Aug) reported that it will sell its 30% stake in JSC  Minudobreniya (Rossokh) to Laguz Management Limited, a company controlled by Arkady Rotenberg. Yara’s stake in Minudobreniya is owned through a 37.692% interest in Yaibera Holdings Limited, which owns 79.59% of JSC  Minudobreniya. Yara and the other shareholders in Yaibera have all decided to sell their shares. Yara will receive USD 390mn from the deal effectively valuing 100% of JSC  Minudobreniya at USD 1.3bn.

Bottom line

We view the news as neutral for Russian fertiliser producers. We note however that the implied valuation of USD 1.3bn is far below the figure disclosed earlier by Vedomosti (28 July) when the newspaper quoted unnamed sources as saying that 100% of JSC  Minudobreniya was worth around USD 2bn. Based on JSC  Minudobreniya’s 2010 revenues of RUB18.9bn and net profit of RUB2.5bn the deal’s implied P/S and P/E multiples are a respective 1.9x and 14.6x, which is largely in line with the averages for Russian fertiliser makers.