OAO Polymetal, Russia’s largest
silver producer, plans a primary London listing in 2011 followed
by a $500 million share sale as the country’s metals producers
seek access to foreign investors and currency for acquisitions.
Under the plan, the company will be taken over by Jersey,
Channel Islands-registered Polymetal International Plc in a
share swap due to close Oct. 21, according to a statement today.
“Shares are expected to start unconditional trading on the
London Stock Exchange in the first week of November,” Vitaly Nesis, chief executive officer of St. Petersburg-based
Polymetal, said in a phone interview. The company may later gain
entry to the benchmark FTSE 100 Index of stocks, Nesis said.
The company follows OAO Polyus Gold, a Russian producer of
the precious metal, which moved its listing to London from
Moscow in July. Evraz Group SA (EVR), the country’s largest steelmaker
by output, said on Aug. 3 it was weighing similar plans. Polyus
is using funds to expand as part of its goal of becoming one of
the world’s five-biggest gold miners within five years.
“Being a premium listed company gives us a much more
credible and versatile acquisition currency,” Nesis said.
Polymetal will begin its London road-show on Oct. 3, meeting
“with 15 of the top 20 institutional shareholders” to convince
them of the need for the share swap, he said.
HSBC Holdings Plc, Morgan Stanley, Deutsche Bank AG, VTB
Capital and Collins Stewart are managing the deal.
Main Holders
Five shareholders with a total 51.1 percent stake agreed to
exchange their stakes, according to the statement. Management
board members including Nesis will swap holdings of 0.8 percent.
The main investors on Dec. 31 were Petr Kellner, owner of
PPF Group NV, with 19.58 percent, Alexander Nesis, brother of
the CEO, with 18.9 percent, and Alexander Mamut with 10.73
percent. Treasury shares totaled 9.5 percent, according to a
company report. Bobby Godsell, a former CEO of AngloGold Ashanti
Ltd. (ANG), will become independent non-executive chairman.
“For the time being we definitely intend to stick to the
former Soviet Union for MA activity and we are mostly looking
for deals that are accretive bolt-on acquisitions,” Nesis said.
Polymetal will focus on precious metals, mainly silver and gold.
The company will use proceeds from the $500 million sale of
new shares after the swap to fund a mandatory offer to minority
shareholders who decline to exchange their stock. Moscow-traded
shares and London global depositary receipts will be delisted.
Dividend Payment
The producer may need to buy about 8 percent to 13 percent
of outstanding shares for cash from minorities to complete the
transaction, said Mikhail Stiskin, a Troika Dialog analyst.
Polymetal International plans to pay 20 percent of its net
income as dividends, provided the ratio of net debt to adjusted
earnings before taxes, interest, depreciation and amortization
is no more than 1.75, it said. The company plans to pay 20 cents
per Polymetal International share this year, it said.
Polymetal fell 4.8 percent to 505 rubles by 2:47 p.m. in
Moscow trading after earlier rising as much as 3.7 percent.
To contact the reporters on this story:
Yuliya Fedorinova in Moscow at
yfedorinova@bloomberg.net;
Firat Kayakiran in London at
fkayakiran@bloomberg.net
To contact the editor responsible for this story:
John Viljoen at
jviljoen@bloomberg.net
Please enable JavaScript to view the comments powered by Disqus.