Stake deal ends for Russia’s largest gold miner Polyus
Moscow — Russia’s largest gold miner Polyus said on Monday that plans to sell a 10% stake to a consortium led by China’s Fosun International had been dropped after one of the conditions of the agreement was not met.
The Fosun-led consortium had been in talks since 2016 to buy a minority stake in Polyus, which is controlled by the family of Suleiman Kerimov.
The Russian tycoon was arrested as part of a tax evasion case in France late in 2017.
Shares in the gold producer declined 3.6% to a five-month low after news that the $887m stake deal had fallen through, leaving the company the worst performer on the Moex index
"After the condition precedent was not satisfied, the parties discussed further options but did not reach a consensus, following which Polyus Gold International proposed to terminate the agreement," Polyus said in a statement.
"The parties agreed to terminate the agreement, including the option for the consortium to acquire an additional 5% of the company’s share capital pursuant to the agreement."
Russia, the world’s third-largest gold producer, has been seeking investments from Asian countries, including China, since sanctions were imposed on Moscow by the West over its actions in Ukraine.
The deal for the Fosun-led consortium to buy 12,561,868 ordinary shares was signed in May 2017 and later delayed until February 2018.
Polyus delisted from the London Stock Exchange in 2015, but it returned to London in June 2017, buoyed by hikes in international gold prices and news of the Fosun-led deal.
The Chinese deal had valued the Russian company at $70.6 per share, which was equal to the upper end of the price range for its share offer.
Fosun’s interest in the gold miner came at a time when a number of Chinese companies were targeting gold mine acquisitions in an attempt to build on domestic demand amid the global recovery in prices.
China, the world’s top consumer, producer and importer of gold, has ambitions to be a global price setter.
It was to be the Chinese group’s first Russian deal.
Fosun had already set up two subsidiary companies, Fosun Management (Russia) and Fosun Eurasia Capital, with the aim of building its asset management business in Russia and neighbouring regions, according to the company’s website.