Moscow-based gold mining company Polyus has announced that it intends to sell shares in the UK and Russia. This move comes two years after the mining contractor delisted the company from the London Stock Exchange.
Polyus Chief Executive Pavel Grachev said that the company will become the fourth largest mining company in the world by 2019 when output is taken into consideration. It was the eighth largest company in 2016.
Polyus, which is controlled by Said Kerimov, intends to divest its existing and new shares through a secondary stock offering. This will allow the company to raise around $700 million. The company decided to take this route after it won a contract via an auction to develop the largest gold deposit in Russia, Sukhoi Log. It will use the funds raised to finance the development as well as clear its debt.
Grachev said that selling the company shares through a secondary offering will help long-term growth.
It is anticipated that some of the shares being sold will be traded on the London Stock Exchange as global depositary shares. These shares will be newly issued shares, while the remaining shares will be owned by Kerimov. Should this happen, Kerimov could receive close to $300 million.
Return after a hiatus
Polyus decided to delist from the London Stock Exchange after the Russian Government urged companies to return to the country after it faced criticism over the conflict in Ukraine. This resulted in Polyus moving back to Russia in 2015 and listing its shares on the Moscow Exchange.
Now, 7 per cent of the company’s stock is traded on the Moscow Exchange, and the secondary offering will also trade about 7 per cent of the company’s equity on the London Stock Exchange.
Just a few days ago, Polyus reached an agreement with Fosum Group of China to sell it 10 per cent of its stock, with an option to buy another 5 per cent at a later date.