Last week, we noted that Mikhail Prokhorov procured a major stake in the world’s biggest potash miner, Uralkali. Now, we’ve learned in doing so, he may have saved the company’s CEO’s freedom.
Until July, [Uralkali] was partners with Belarus’s state-owned potash company, Belaruskali, in an informal cartel that kept prices high. It then abruptly broke up the arrangement, ensuring that prices would fall, allegedly because its partner was striking secret side-deals.
In response, the prime minister of Belarus lured Uralkali’s CEO, Vladislav Baumgertner, to Minsk, and threw him in prison.
This elevated a boardroom dispute to a diplomatic clash between Russian president Vladmir Putin and Belarus’s own autocratic ruler, Alexander Lukashenko, whose country’s economy is heavily dependent on both potash exports and Russian largesse. Belarus apparently demanded new ownership for Uralkali, and that’s where Prokhorov came in. Onexim, the investment fund he founded, purchased 21.7% of the company from the former majority owner and fellow billionaire Suleyman Kerimov. The price was not revealed, but at its current market capitalization the shares are worth $3.3 billion. The second largest owner? China’s sovereign wealth fund.
With new ownership in place, Belarus is reportedly planning to allow Baumgertner, who was released to house arrest in Minsk after a month in prison, to be extradited to Russia as long as he is charged with a crime there. Once out of Belarus, those charges may be dropped, and there has been some speculation that the company may seek to re-establish the joint marketing relationship.
As a basketball analyst, I’m underqualified to speak on foreign relations regarding the distribution, mining, and negotiation process of potash halfway across the world, so let’s just say that I’m glad that Prokhorov was able to, at least temporarily, smooth over foreign relations between Russia and Belarus.
Now all Prokhorov needs to buy is an NBA championship within the next two years to preserve his own freedom.