Updated at 11:30,08-12-2016

Izvestia: Grodno Azot to be sold to Russian oligarch

Selling the company is compensation for "solvent" smuggling demanded by Russia.

Belarusian state concern Belneftekhim is ready to sell the controlling interest in Grodno Azot joint-stock company to a Russian company. The most possible buyer is EuroChem owned by oligarch Andrey Melnichenko, Izvestia newspaper reports.

This conclusion can be made from a letter of Belarusian PM Mikhail Myasnikovich to Russian PM Dmitry Medvedev. Belarusians would like to organise a tender for several bidders. The investor is expected to assume obligations on constructing a new nitrogen unit and supplying cheap natural gas to the enterprise.

The Russian side has long ago been insisting on buying the Belarusian enterprise.

Grodno Azot is a Belarusian monopoly producer of nitrogen products. The enterprise produces fertilisers, liquid ammonia for technical use, biodiesel, chemical fiber, etc. About 50% of products are exported.

EuroChem, Russia's largest mineral fertiliser producer, is ranked among the top ten global players. EuroChem's main products are nitrogen and phosphate fertilisers and iron ore concentrate. A 99.9% stake in EuroChem belongs to Cyprus-based company MCC Holding Limited, a 95% stake of which is owned by Andrey Melnichenko, the chairman of EuroChem's board of directors, and a 5% stake is owned by EuroChem CEO Dmitry Sterzhnev.

Representatives of Grodno Azot have not replied to a request of the Russian newspaper. EuroChem declined to comment saying they have not received official proposals on a deal.