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October 13, 2011 5:05 pm
Polyus Gold has moved to redomicile in the UK by early November, paving the way for Russia’s biggest gold miner to become a premium-listed FTSE 100 candidate by the end of the year.
Polyus’s move from Jersey to UK incorporation, which it initiated last week, is one of the last steps in its protracted transition from a Moscow to a London-listed company.
However, one hurdle remains as Polyus must convince the UK Listing Authority to admit it to the premium list with a free float of 13 per cent. Premium listing applicants with a free float of less than 25 per cent must receive a waiver.
Polyus, which would become London’s biggest gold miner by far in production terms, is tightly held by Mikhail Prokhorov and Suleiman Kerimov, two Russian billionaires who are the company’s majority shareholders. Kazakh miner Eurasian Natural Resources Corp has the smallest free float of London’s FTSE 100 companies with 18 per cent of shares freely traded.
“The size of the company helps,” said German Pikhoya, chief executive, referring to Polyus’s application to waive the free float requirement. Its market value in Moscow is 356bn rubles ($11.4bn) and with a 13 per cent stake worth more than $1bn, its market value would be more than many FTSE 250 companies.
The company has assembled an independent board led by Bob Buchan, the former chief executive of Canada’s Kinross Gold. Mr Pikhoya added that its move to become a fully UK-domiciled company with independent corporate governance, was aimed at one goal.
“The whole point about moving to the mainland is related to regulations of the FTSE 100,” he said. “Given the fact that we have two controlling shareholders, we cannot be admitted to the FTSE 100 unless we are UK residents.”
Polyus aims to be a UK-domiciled company with a premium “on or around” November 9, according to its scheme of arrangement timetable. Mr Pikhoya said he could not comment on when UK regulators would rule on the free float waiver. “If everything goes right, we will achieve all the targets in front of us by the end of the year,” he said.
Mr Buchan said: “The motivation for me to join was that the senior shareholders are motivated to allow the management to take the company to being one of the major gold players in the world.
“If at some point in the future an opportunity of substance came along that was brought to the board, you don’t have to make a lot of phone calls. It is really easy to get a deal done.”
Mr Buchan added that there was room for a new multinational gold miner. “I think a lot of people are stumbling at the higher end,” he said. “And there’s room for someone with an innovative view and a supportive shareholder base to accomplish it.”
Polyus is gunning for London’s premier share index at the same time as Polymetal , a Russian gold and silver miner. Both are moving from Moscow-listed precious metals miners trading global depository receipts in London to premium-listed companies.
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