Moscow – PhosAgro (“the Company”, Moscow Exchange, LSE: PHOR), one of the world’s leading vertically-integrated phosphate-based fertilizer producers, announces that shareholders of JSC PhosAgro-Cherepovets and JSC Apatit approved the reorganisation of the companies at an Extraordinary General Meeting of shareholders (EGM) on 14 July 2017.
PhosAgro-Cherepovets will be merged into Apatit, which on 1 June 2017 changed its location to Cherepovets, Volgoda region. A Kirov-based subsidiary has been established in Kirovsk, Murmansk region, where Apatit was previously registered.
Shareholders approved agreement on the merger of PhosAgro-Cherepovets into Apatit, as well as transfer deeds to the agreement. The merger is planned for completion around 1 November 2017.
Commenting on the planned merger of PhosAgro-Cherepovets into Apatit before the EGM, PJSC PhosAgro CEO Andrey Guryev said he hoped “we will be able to achieve even higher levels of operational efficiency from our enterprises by removing functional duplications as part of a single legal entity, and also to strengthen the competitive advantages that our vertically integrated business model gives us in terms of producing high-quality phosphate rock and phosphate-based fertilizers.”
The merger of PhosAgro-Cherepovets into Apatit and the establishment of the Kirovsk subsidiary of Apatit will help to optimise management processes and remove duplications of a number of administrative functions, and increase supply efficiency by centralising and enlarging orders for goods and services. The organisational structure of PhosAgro Group will also be simplified.
The structure of tax contributions to the regional budgets of Murmansk and Vologda regions, where Apatit and PhosAgro-Cherepovets, respectively, are among the largest taxpayers, will not change significantly following the planned merger. No headcount optimisation is planned at either site as a result of the merger, and all social obligations will be maintained at previous levels.
Following an evaluation of the functioning of the combined entity, PhosAgro Group will consider the merger of JSC Metachem into Apatit, and thus the completion of the combination of the Group’s production assets into a single legal entity.