PhosAgro, a phosphate-based fertiliser producer, is planning to merge two of its subsidiaries, OJSC Ammophos and OJSC Cherepovetsky Azot.
The proposed merger could reduce managerial and transaction costs, minimise borrowing and debt-servicing costs, create a single system to manage rail, energy and transport infrastructure, inventory and material and technical resources, service shops and maintenance services.
The transaction would create a new company with all the rights and obligations of the two subsidiaries. Shareholders will receive shares of the new company, while the with the original companies cease to exist as legal entities.
PhosAgro CEO Maxim Volkov said the merger of Ammophos and Cherepovetsky Azot would also reduce the administrative costs incurred by maintaining two separate legal entities.
''We also plan to consider adding Agro-Cherepovets, another PhosAgro subsidiary, to the newly created company at some point in the future," Volkov added.
The merger is expected to complete in July or August 2012.
