Cleary Gottlieb is representing Potash Corporation of Saskatchewan Inc. (PCS) in its investment in Sinochem Hong Kong Holdings Limited (Sinochem HKHL), a subsidiary of Sinochem Corporation to which the Sinochem group is spinning off its fertilizer division. The deal is expected to close later this summer.
In the transaction, PCS will acquire 9.99% of Sinochem HKHL’s shares at closing, and will have an option to acquire an additional 10.01% of shares within three years of closing. The monetary amount of the initial investment will be based on the institutional bookbuilding price in a forthcoming securities offering of Sinochem HKHL relating to its reorganization and acquisition of the Sinochem group’s fertilizer businesses.
PCS is the world’s largest fertilizer enterprise and the world’s largest producer, by capacity, of potash, phosphate and nitrogen. Sinochem Corporation is one of the oldest and largest state-owned conglomerates in China, and its fertilizer business has been the leading supplier of fertilizer products in terms of sales volume in China. The Chinese market represents about 30% of worldwide fertilizer sales.