Morgan Lewis ex-Dewey team acts alongside Norton Rose on Kazakh potash purchase

The deal will see Hong Kong-based private equity firm Sprint Capital acquire a potash project in western Kazakhstan via an agreement with its investment vehicle Kazakhstan Fertilisers Group and Kazakh potash exploration group Satimola to acquire Satbor.

Morgan Lewis acted for Sprint Capital on the deal, with a team led by Almaty business and finance partner Aset Shyngyssov, the primary relationship partner, and London business and finance partner Amy Comer, alongside Almaty business and finance counsel Klara Nurgaziyeva.

Comer joined Morgan Lewis in May alongside fellow London Dewey & LeBoeuf partners Bruce Johnston and Amanda Jennings. At the same time a Dewey Moscow team including senior partners Jonathan Hines and Brian Zimbler, as well as the firm’s Almaty-based partner Aset Shyngyssov, joined Morgan Lewis allowing the firm to open a fully-fledged office in Kazakhstan (4 May 2012).

Norton Rose advised Satimola on selling Satbor, its potash mining and exploration business in western Kazakhstan. London-based corporate partner Simon F T Cox led alongside tax partner John Challoner and banking partner Dan Kennedy.

Following Norton Rose’s merger with Macleod Dixon on 1 January this year, the UK firm acquired Macleod Dixon’s office in Almaty (10 October 2011)

The Morgan Lewis team first started working on the deal while still at Dewey. In November 2011, Spring Capital made an initial investment in Satbor to the tune of $10m (£6.5m). The then-Dewey team advised Spring Capital on the transaction, with Shyngyssov leading the matter. Former Dewey partner Russell Van Praagh was also involved in the deal, opting to join McDermott Will & Emery in April this year (16 April 2012). Norton Rose also advised Satbor on the investment.

Another aspect of the transaction saw Asia Pacific Resources Development Investment Limited, the parent company of Kazfert, enter into a Notes Subscription Agreement with Satimola to provide interim funding to finance the completion of the bankable feasibility study, environmental impact survey and basic engineering works. Norton Rose also advised Satimola on this aspect of the deal.

The parties have now signed the documentation but the deal has not yet closed. The project is believed to have the potential to produce in excess of six million tons of potash per annum to be used in fertiliser production. While the exact value of the transaction has not yet been disclosed, according to reports, Spring Capital’s managing director Chris McAuliffe has said that the project would require around $3bn (£1.9bn) in capital to bring it from the feasibility study stage right through to the mining and the final potash production stage.

Satimola was interested in listing on the London Stock Exchange in 2010 but was forced to call off the IPO due to unfavourable market conditions. It subsequently explored several other options including a trade sale, and went through an auction process to find a buyer.

Earlier this month Ashurst advised Spring Capital on a A$36m (£24m) 25 per cent stake and subscription and co-operation funding agreement with Australian coal developer Stanmore Coal.