OREANDA-NEWS. Belarus' State Property Committee has announced an open tender to sell state-owned 1,629,515 shares (a 25% stake plus one share) in OAO Grodno Azot, the committee said in a release.

The government is looking for a strategic investor and is ready to sell the parcel for at least USD 414 million. The selling price includes the cost of direct supply of natural gas via the gas pipeline main of OAO Gazprom transgaz Belarus to OAO Grodno Azot.

In line with the terms of the tender, the investor will have to contribute at least USD 440 million by purchasing a supplementary issue of Grodno Azot shares at their market price (as of Jan 1, 2014), so that the strategic investor's stake in the company does not exceed 50% plus one share. The finance will be poured into production upgrade at Grodno Azot.

The investor is also supposed to maintain certain welfare standards for the company personnel for a 5-year period after purchasing the asset. During the five-year period the investor will have to make sure OAO Grodno Azot demonstrates cost effective performance and satisfies the demand for nitrogen fertilizers on the home market (according to annual plans made by the Ministry of Agriculture of Belarus).

The investor will also have to sign an investment contract with the Economy Ministry to finance a project to build new facilities till December 31, 2019 for manufacturing ammonia (2,500 tonnes per day - 875,000 tonnes per year), carbamide (3,400 tonnes per day - 1.19 million tonnes per year)

The investor is also expected to financially support a project to build a main hydrogen plant (30,000 cubic metres an hour, 200 million cubic metres a year).

The investor is supposed to have proprietary resources or guarantees of natural gas supplies enough for keeping OAO Grodno Azot's current facilities and the future nitrogen facility operating at full capacity for at least ten years. Before all the commitments are honoured, the investor's rights to manage OAO Grodno Azot shares will be restricted. Apart from that, till 2025 Belarus will enjoy the priority right to buy shares of the company.

The closing date for tender applications is 17:00 on July 28, 2014.

Russia's EuroChem and Gazprom Investproject were mentioned earlier as potential partners of Belarus' largest producer of nitrogen fertilizers OAO Grodno Azot. Russia's EuroChem CEO Dmitri Strezhnev visited Minsk on April 7 to discuss the matter with Belarusian Premier Mikhail Myasnikovich on April 7.

In the meantime, in the summer of 2013 Grodno Azot and Gazprom made a preliminary agreement to develop the provisions of a project to build a new nitrogen plant at Grodno Azot.

Belarusian Vice Premier Vladimir Semashko said early this year that Belarus would announce a tender in April to choose a strategic investor for implementing an upgrade project at Grodno Azot.

Grodno Azot is one of the few integration projects Belarus is supposed to implement with Russia.

Grodno Azot was set up in 1963 and transformed into an open joint-stock company in 2002. The Belarusian government holds a 99.97% stake.

Grodno Azot is Belarus' main producer of liquid ammonia, nitrogen fertilizers, methanol, caprolactam, biodiesel fuel.