Court Claim challenges Silvinit shareholder general meeting decisions and Merger Agreement

28.02.2011
OJSC Uralkali ("Uralkali") informs the market that on 24 February 2011 OJSC Acron, LICONA (INTERNATIONAL) LIMITED, Medvezhonok Holdings Limited and ROF (Cyprus) Limited filed a claim against OJSC Silvinit ("Silvinit") and Uralkali in the Perm Territory Arbitrage (Commercial) Court seeking to invalidate decisions approved by the Extraordinary General Shareholders Meeting ("EGM") of Silvinit on 4 February 2011, and the merger agreement entered into between Uralkali and Silvinit. The claimants are again attempting to challenge the share conversion ratios duly approved by the shareholders of both companies and are seeking an injunction to block the merger-related procedures approved at the EGM of Uralkali and Silvinit where the shareholders of Silvinit voted 90.9% in favour of the merger and Uralkali shareholders voted 98.9% in favour of the merger.

Uralkali and Silvinit believe that the overriding majority of shareholders who approved the merger in accordance with corporate governance best practice have given valid and appropriate shareholder approval to the merger and the benefits that would derive for all shareholders.

The Boards of Directors of both companies received independent advice on the value and merits of the merger for all shareholders. The merger was determined by the Boards of Directors of both companies to be in the best interest of all shareholders and this was reflected in the very strong support given to the Boards by the vote at the EGM of each company on 4 February 2011. Uralkali and Silvinit believe that the merger will provide the platform for delivering significant growth and synergies in a market that requires scale potash providers to support modern agricultural and technological practices.

Uralkali and Silvinit believe that the claim is entirely without merit and intend to contest it vigorously in accordance with Russian law in order to complete the merger pursuant to previously announced timetable and in accordance with the terms that have been announced and subsequently voted on by the shareholders of both companies.

Enquiries:

Investor Relations

Anna Batarina, CFA
Vice President, Investor Relations, Uralkali
Tel.: +7 (495) 730 2371
E-mail: anna.batarina@msc.uralkali.com

Media Relations

Alexey Sotskov
Head of Media Relations, Uralkali
Tel.: +7 (495) 730 2373
E-mail: alexey.sotskov@msc.uralkali.com

Brian Cattell / James Devas
Maitland Communications
Tel: +44 (20) 7379 5151
E-mail: bcattell@maitland.co.uk

IMPORTANT NOTICES

This announcement is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase, exchange  or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England.  Except as required by applicable law, copies of this announcement are not being, and may not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction.  Persons receiving this announcement should observe these restrictions and should not send or distribute documents in or into any Restricted Jurisdiction.

Notice to U.S. investors

The proposed business combination involves securities of a non-US company.  It is important for U.S. securities holders to be aware that this announcement is subject to disclosure and regulations in England that are different from those in the United States. In addition, U.S. securities holders should be aware that this announcement has been prepared in accordance with English format and style, which differs from the U.S. format and style. In particular the financial information of Uralkali and Silvinit included herein has been prepared in accordance with International Financial Reporting Standards, and thus may not be comparable to financial information of U.S. companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

It may be difficult for U.S. securities holders to enforce their rights and any claim they may have arising under the U.S. federal securities laws, since Uralkali is located in the Russian Federation, and some or all of its officers and directors may be residents of countries other than the United States.  U.S. securities holders may not be able to sue a non-U.S. company or its officers or directors in a non-U.S. court for violations of the U.S. securities laws. It may be difficult to compel a non-U.S. company and its affiliates to subject themselves to a U.S. court's judgment.

Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an exemption from such registration. The Uralkali Shares to be issued in connection with the Proposed Combination are not, and will not be, registered under the Securities Act or under the securities laws of any jurisdiction of the United States and will be issued to Silvinit Shareholders in the United States in reliance on the exemption from registration provided by Rule 802 under the Securities Act and in reliance on available exemptions from any state law registration requirements. The securities of Uralkali and Silvinit have not been, and will not be, registered under the Securities Act or under the securities laws of any jurisdiction of the United States.

No profit forecast

Nothing in this announcement is intended to be, or is to be construed as, a profit forecast or to be interpreted to mean that earnings per Uralkali Share, Uralkali GDR, or Silvinit Share for the current or future financial years, or those of either Uralkali or Silvinit, will necessarily match or exceed the historically published earnings per Uralkali Share, Uralkali GDR or Silvinit Share.

Forward looking statements

This announcement, including any information included or incorporated by reference, may contain "forward-looking statements" concerning Uralkali and Silvinit. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Uralkali and Silvinit operations and potential synergies resulting from the Proposed Combination; and (iii) the effects of government regulation on the businesses of Uralkali and Silvinit. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Each of Uralkali and Silvinit assumes no obligation in respect of, and does not intend to update, these forward-looking statements.
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