Sinochem HK To Buy Fertilizers From Potash; Up To $432.3M

This follows a memorandum of understanding signed early last year, Sinochem Hong Kong said in a statement.

Sinochem Hong Kong signed a MOU to buy at least 1.5 million metric tons of Canadian potash in 2006 from Canpotex Ltd., the international distribution arm of Potash.

Separately, state-owned Sinochem Corp., which holds 53.53% in Sinochem Hong Kong, will buy at least 1.5 million tons of potash from Potash Corp. in 2006.

The purchase is part of a MOU signed between Sinochem Corp. and Canpotex in 2003, in which Sinochem Corp. agreed to a purchase contract for each of the years from 2004 to 2006.

In late January 2006, Potash said it raised its stake in Sinochem Hong Kong to 20% from 9.99% at a cost of HK$977.3 million (US$125.3 million).

Sinochem Hong Kong said it has decided to disclose the memoranda of understanding because Potash is now a substantial shareholder, and such transactions are considered connected transactions.