PhosAgro Declines to Participate in Apatit Tender

14 Jun 2012 13:40

For Immediate Release 14 June 2012

PhosAgro Declines to Participate in Apatit Tender

Moscow - PhosAgro ("PhosAgro" or "the Company") , a leading global vertically integrated phosphate-based fertiliser producer, announces that it has declined to participate in the 14 June 2012 tender for the privatisation of the Russian Federation stake in Apatit organised by BNP Paribas.

This decision is due to the fact that the tender organiser, BNP Paribas, to date has not disclosed or clarified several significant conditions of the tender, as well as the means of achieving the goals outlined in the Russian Federation Government decree â„-1920-p dated 3 November 2011. The Russian Federation Government decree, for example, states that the primary goal in granting BNP Paribas the exclusive responsibility for implementing the state decree for organising and executing on behalf of the Russian Federation the sale the Apatit shares currently under state ownership was to establish conditions for attracting investments, supporting the development of financial markets, as well as modernisation and technological development of the economy. However, PhosAgro to date does not understand how the tender organised by BNP Paribas will support achievement of the goals laid out by the Government.

On the eve of the tender the organiser informed PhosAgro that it had declined to accept the Company's offer, which included a price and other conditions and offers to the Government, despite the fact that these conditions and offers were aimed at implementation of the Russian Federation Government decree â„- 1920-p dated 3 November 2011.

In connection with this situation, and the fact that Acron is currently challenging the Federal Property Management Service's actions in an attempt to have them declared illegal, PhosAgro has decided not to participate in the tender in order to avoid being caught up in court processes regarding the legality of its acquisition of the Russian Federation Government's stake in Apatit through the tender scheduled for 14 June 2012.

At the same time, PhosAgro confirms its interest in acquiring the Apatit shares currently owned by the Russian Federation Government, and hopes that the current discrepancies will be corrected.

For further information please contact:

OJSC PhosAgro

+7 495 231 2747Irina Evstigneeva, Head of Corporate Finance and Investor RelationsTimur Belov, Press OfficerM:CommunicationsSam VanDerlipvanderlip@mcomgroup.com+7 495 363 2845Notes to Editors

PhosAgro is a leading global vertically integrated phosphate-based fertiliser producer. The Group focuses on the production of phosphate-based fertilisers, feed phosphate and high-grade phosphate rock (P2O5 content of not less than 35.7 percent), as well as ammonia and nitrogen-based fertilisers. The Group is the largest phosphate-based fertiliser producer in Europe, the largest producer of high-grade phosphate rock worldwide and the third largest MAP/DAP producer in the world (excluding China), according to Fertecon. PhosAgro is also a leading producer of MCP feed phosphates in Europe, and the only producer in Russia.

PhosAgro has 2.1 billion tonnes of resources (according to JORC) of high quality apatite-nepheline ore, representing over 75 years of production. The Group also controls substantial Al2O3 resources, and has 41% of Russia's rare earth oxides resources.

The Group's mines and phosphate rock production facilities are located in the mountainous areas of the Kola Peninsula in the Murmansk region of northwest Russia, whereas its fertiliser and feed phosphate production assets are located near the city of Cherepovets in the Vologda region and near the city of Balakovo in the Saratov region of southwest part of European Russia. The Group is the only global vertically integrated fertilizer producer that derives approximately 90% of its consolidated gross profit from the phosphates segment. PhosAgro's 2011 IFRS revenue was USD 3.4 bln and EBITDA was USD 1.2 bln. The С ompany's net debt/EBITDA ratio was 0.43 at 31 December 2011.

For further information on PhosAgro please visit: www.PhosAgro.com