Polyus Gold, Russia’s largest gold producer, aims to apply for and obtain a full share listing on the London Stock Exchange next month after it sold stakes to China’s CIC and Russia’s number two lender VTB, it said on Thursday.
The company, owned by tycoons Mikhail Prokhorov and Suleiman Kerimov, now has global depositary receipts trading in London and aims to get a so-called premium listing, which would put the $7.4-billion (U.S.) gold miner in a stronger position for possible international mergers.
“As already the largest gold producer in Russia and one of the top ten globally, Polyus Gold aspires to become one of the world’s leading gold mining companies,” German Pikhoya, chief executive officer of Polyus, said in a statement.
“This ambitious plan is underpinned by the world’s third largest reserves position, and a premium listing in London will, amongst other things, further enable us to access the international capital markets to support these expansion plans.”
Polyus, which lost 22 per cent of its market capitalization in the past three months, expects to obtain admission to the premium listing on or around June 19, 2012.
Polyus’ GDRs slid 1.4 per cent to $2.6 in London trade on Thursday, while spot gold prices rose almost 1 per cent to $1,527 per ounce, bouncing off a 4-1/2 month low, as dropped prices attracted new physical buyers.
The company raised $635-million this month by selling a stake of 5 per cent minus one share to Chengdong Investment Corporation, a subsidiary of China’s CIC, and 2.5 per cent to VTB.
Polyus now has a free float of 22 per cent, which would be sufficient to secure a premium listing if, as expected, the U.K. Listing Authority grants a waiver from the 25 per cent level it typically requires for a premium listing.
In order to gain entry into London’s blue-chip FTSE 100 index in the future, Polyus would need to sell significantly more shares to reach a free float of 50 per cent or move its domicile from Jersey to mainland Britain.