Polymetal, one of Russia’s largest producers of gold and silver, is reportedly targeting a primary London listing later this year which could value the company at £5bn ($8bn).
Russia's largest silver and third largest gold producer by reserves is believed to have initiated consultations with a number of investment banks regarding the flotation, according to The Sunday Telegraph.
Polymetal already has GDRs listed in London thanks to a 2007 initial public offering (25 per cent of its shares were floated in the UK capital, with the remainder offered in Moscow), but is now believed to be in talks with banks about a primary listing of its newly-formed London-registered parent company, Polymetal International.
Speculation of a potential share sale has been circulating for some time as part of a plan to obtain a full London listing for Polymetal via its new parent company. Russian press reported last year that Polymetal's core shareholders would transfer shares to PMTL, a Cyprus-registered holding company, and then receive shares in Polymetal International on a pro rata basis. The London-registered entity would then hold a $1bn IPO in London and Moscow.
News of Polymetal’s intentions comes as Polyus Gold, Russia’s largest gold miner, is poised to complete a reverse takeover of its subsidiary KazakhGold to gain a listing in London. The reverse merger is due to be completed by July 25 and the combined company will be the largest gold miner on the London market by production.
But while Polyus may be the larger company, Dmitry Smolin, metals analyst at Uralsib Capital in Moscow, said Polymetal is the best play among Russian gold names and has a Buy recommendation on the stock.
Meanwhile, analysts at HSBC say investors' Polymetal shares will benefit from the company’s continued production growth as well as its exposure to strong silver and gold prices. Its gold-equivalent production is expected to grow 24 per cent in 2011, according to the bank's estimates, and by another 25 per cent in 2012.
Russia’s largest gold producers:
Source: Polyus Gold
Polymetal’s largest shareholders include ICT Group owned by Alexander Nesis (23.97 per cent), who also has a significant holding in UralKali, Czech private equity firm PPF Group led by Peter Kellner (24.82 per cent), and entrepreneur Alexander Mamut (19.02 per cent).
See also:
Russia’s top gold producer nears backdoor London listing - FT Tilt
Meet Alexander Mamut – a busy tycoon - FT Tilt
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