Potash Corp to acquire up to 20pc stake in the Hong Kong-listed unit of mainland's largest fertiliser importer Potash Corp of Saskatchewan, one of the world's largest fertiliser makers, will buy up to 20 per cent of Sinochem Hong Kong (Group) - a move that will increase its exposure to China, the world's largest fertiliser market. Sinochem HK, parent of Sinochem Hong Kong (Group), would sell 5.8 billion existing shares, or a 9.99 per cent stake, to the Canadian firm, and give it the option to buy an additional 10.01 per cent stake, it said yesterday. Sinochem HK, a subsidiary of Sinochem Corp, is China's largest fertiliser importer. Potash is an ore used to make chemical fertilisers. It is mined primarily in the Canadian province of Saskatchewan and Russia. The disposal is part of Sinochem HK's plan to reduce its stake in Sinochem Hong Kong (Group) to meet listing requirements. It is injecting its fertiliser assets into Sinochem Hong Kong (Group) in a reverse takeover deal that will leave it holding a 94.65 per cent stake. Regulators consider the reverse takeover as a new listing and, as a result, Sinochem HK must cut its stake in Sinochem Hong Kong (Group) to meet the minimum public float requirement of 75 per cent. The new listing is sponsored by Cazenove and Goldman Sachs. Besides selling shares to the Canadian firm, Sinochem HK is offering Sinochem Hong Kong (Group)'s independent shareholders the right to buy three new shares at 10 cents apiece for every one they hold. The offer is equivalent to a 13.04 per cent stake and is seen as an attempt to regain investor confidence after Sinochem Hong Kong shares plunged 40 per cent when the reverse takeover was announced in February. The plunge was triggered by the 10 cent apiece price at which shares were issued to the parent - a price that represented a nearly 80 per cent discount. Sinochem HK would also raise $365 million through a private placement of 3.9 billion new shares to institutional investors and the price of these shares would be determined by a book-building exercise, the statement said. A source close to the deal said the Canadian firm had its sights set on increasing sales in China through the alliance. 'Sinochem Hong Kong is the exclusive importer of Potash's products in China. As China will open up its fertiliser market in 2007, Potash is certainly keen to expand its presence and Sinochem Hong Kong already has an extensive sales network,' he said. The Potash Corporation of Saskatchewan is the world's largest maker of potash fertiliser. It sells 11 per cent of its output to China. Sinochem Hong Kong (Group) shares fell 12.06 per cent to 25.5 cents apiece yesterday in their first day of trading since being suspended nearly two weeks ago.