MOSCOW – Russia's top gold producer Polyus will offer new and existing shares in a secondary share offering in both London and Moscow, it said on Monday, in a deal that will test investor appetite for Russian assets.
Polyus delisted from the LSE in late 2015 after Western sanctions over Moscow's role in the Ukraine crisis began to bite for Russian companies. However it returns to London, buoyed by an 11% rise in global gold prices this year and by a separate $887-million deal to sell 10% of the company to a Chinese consortium led by Fosun International.
As part of its secondary share offering for 7% of the company's equity, Polyus expects to raise $400-million from the sale of new shares. Further proceeds from existing equity will go the company's controlling shareholder, the family of Russian tycoon Suleiman Kerimov.
The company, listed on the Moscow Exchange with a market capitalisation of $9.9-billion and a free float of 6.76%, plans to use the proceeds from the planned share sale to repay some of its debt and finance projects.
The Chinese deal had valued Polyus at $9-billion, or $70.6 per share, compared with 4 423 roubles ($78) per share at the market close on Friday. The shares were up 0.4% at 4 440 roubles on Monday.
Other large Russian companies will be watching the Polyus offering with interest, hoping to gauge the likelihood of a robust return of investors that took flight after Moscow annexed Crimea from Ukraine in 2014.
The first $500-million-plus offering on the Moscow market this year could be followed by an initial public offering (IPO) from En+ Group, which manages Russian tycoon Oleg Deripaska's aluminium and hydropower businesses, sources have told Reuters.
State shipping company Sovcomflot is also expected to launch an IPO before long.
Polyus, meanwhile, is looking for a successful share sale to boost funds after winning a licence in January for one of the world's biggest untapped gold deposits and as it prepares to start production at its large Natalka deposit in late 2017.