Sberbank, Deutsche Bank eye Belarus potash maker

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Sberbank and Deutsche Bank will extend a $2 billion loan to Belarus backed by a 35-percent stake in the country's main economic asset Belaruskali, the head of Russia's biggest bank said on Friday.

The announcement came one day after India's ambassador to Belarus said his country was also interested in buying into the potash producer, which accounts for 16 percent of global potash fertiliser exports.

Sberbank chief German Gref told Prime Minister Vladimir Putin that the loan would also be secured by future Belaruskali potash deliveries, the RIA Novosti news agency reported.

"We have decided together with Deutsche Bank to extend a $2 billion (1.4-billion-euro) loan to one of Belarus' largest enterprises, Belaruskali," Gref was quoted as saying

"This is not a very easy time for Belarus. But for us, this is a fairly safe, good loan," Gref added without providing details about Deutsche Bank's involvement in the deal.

The Frankfurt-based global giant issued no immediate comment.

Gref said the loan would be issued directly to Belaruskali, which is wholly owned by the state.

Belarus has been mired in a severe current account deficit this year that prompted a 36-percent currency devaluation in May and the imposition of price caps on basic staples.

President Alexander Lukashenko, whose authoritarian rule has isolated him from Western states and resulted in sanctions and travel restrictions on his government, has slapped a $30 billion price tag on Belaruskali.

But reported negotiations over the sale of the firm have been slow, with Russia's top potash producers reportedly pulling out over various complications in the firm's complex ownership structure.

On Thursday, Indian Ambassador Manoj K. Bharti met Lukashenko and later told reporters that his country was eager to take part in Belaruskali's privatisation, should a formal bidding process be announced.

"India is interested in purchasing Belaruskali shares if they are offered," Minsk's official Belta news agency quoted the Indian ambassador as saying.

The importance of potash fertiliser has soared in recent years owing to mounting demand for food in countries such as India and China.

© 2011 AFP

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