Metals producer will go ahead with IPO despite fluctuations in commodity markets and scepticism over former Soviet Union companies
A Russian gold and silver producer hopes to raise $500m (�319.9m) on the London Stock Exchange despite turbulence in the commodity markets and scepticism about companies from the former Soviet Union.
A float by Polymetal, which has mines in Siberia, will further increase the number of mining companies in the index and therefore the exposure of pension funds to extractive industry.
Polymetal is currently valued at $7bn on the basis of its shares listed on the Moscow exchange but will hope to use the new cash raised in London to pay down debt and engage in acquisitions.
"We expect to have a much more attractive and universal acquisition currency for potential M&A transactions," said chief executive Vitaly Nesis.
"In terms of M&A activity we definitely intend to stay in our key geography, that is the former Soviet Union, and we remain committed to precious metals - gold and silver."
There are a dozen mining companies listed in the FTSE 100, which already account for 11.66% of the index, although that does not take account of newly floated businesses such as Glencore. The growing reliance on these miners, some of which have been weak on corporate governance issues, has alarmed some institutional investors.
Chris Searle, a partner at accountant BDO, questioned the wisdom of a Polymetal float. "Investors still have a healthy degree of scepticism concerning Russian companies and the volatile market conditions we have seen this year will not have helped."
Many pension and "tracker" funds are required to automatically purchase shares in businesses that are large enough to take a place in the FTSE 100.
Polymetal was Russia's fourth-largest gold producer and the country's biggest silver producer last year. The company aims to produce more than 800,000 ounces of gold and silver this year, up from 753,000 ounces in 2010, and over 1.4 million ounces in 2014.
The value of gold has dropped slightly recently but has generally increased in value in recent years as investors see the precious metal as a safe haven at times of upset in the financial markets and wider global economy. Polymetal's leading shareholders ? Czech billionaire Petr Kellner's investment group PPF, Nesis family investment group IST and billionaire Alexander Mamut ? have long been considering a shift to Britain to increase liquidity.
But some analysts are questioning the timing of Polymetal's float given the price uncertainty of shares and commodities.
Source: http://www.guardian.co.uk/business/2011/sep/30/russian-gold-miner-polymetal-plans-lse-float
Spending review 2010 Hotels Family finances Lisa Allardice Dance music Motherwell
No comments:
Post a Comment