10-14-13 4:40 AM EDT | Email Article

By Lukas I. Alpert


MOSCOW--Russia's largest lender, Sberbank (SBER.RS), said Monday it is extending the terms of a $1 billion loan to Belarusian state-run potash miner, Belaruskali OAO, by one year amid uncertainty in global markets for the fertilizer ingredient.

Belaruskali has come under deep financial stress since the collapse of its trading partnership with Russian potash producer Uralkali (URKA.RS) in late July. The split effectively ended an informal global pricing cartel which has sent potash prices plummeting.

"This deal with Belaruskali, carried out amid the current uncertainty on the global potash market, shows that Sberbank of Russia is interested in strengthening its partnerships with leading industry players," said Alexey Grenkov, Managing Director of International Coverage in Sberbank CIB's Investment Banking Department.

The break-up of the trading venture, Belarusian Potash Co., led to the arrest of Uralkali's Chief Executive Vladislav Baumgertner by Belarusian police on fraud charges, an allegation Uralkali has dismissed as politically motivated. The arrest has strained relations between Russia and Minsk, and Moscow has been seeking to ease tensions with its neighbor in order to get Mr. Baumgertner returned to Russia.

Sberbank has agreed to extend the terms of the original three-year loan issued on October 2012 to four years, the bank said.

Belaruskali is one of the world's leading potash producers with annual production of over 10 million metric tons, amounting to roughly 16% of global output.


Write to Lukas I. Alpert at lukas.alpert@wsj.com


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(END) Dow Jones Newswires

October 14, 2013 04:40 ET (08:40 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
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