Russia's Polymetal negotiates to keep London listing as GDRs

Polymetal International PK

09/02/2023 06:30

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      This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine
    

  
    By Anastasia Lyrchikova
       MOSCOW, Feb 9 (Reuters) - Russian gold and silver
producer Polymetal  POLYP.L  is negotiating with British
authorities to keep its London listing in the form of global
depositary receipts (GDR) after the company moves to Kazakhstan,
the company's CEO told Reuters. 
    Polymetal last month said it was considering moving its
parent company's domicile and primary listing, currently in
Jersey and London respectively, to "Russia-friendly" Kazakhstan,
which "could unblock the ability to execute further corporate
actions".
    The move would allow the company to spin off the Kazakh
business, which accounts for about 38% of revenue and 32% of
annual production. While domiciled in Jersey, deemed an
"unfriendly" jurisdiction by Russia, no separation of assets is
possible. 
    "We want to take the Kazakh business out of the shadows, out
from under the canopy of sanctions," CEO Vitaly Nesis told
Reuters. "That's why we have to split up the company first."
    Nesis said the company's management was in discussions with
the London Stock Exchange, the FCA regulator and service
providers about retaining a form of LSE listing after the move
to Astana and was counting on clarity within 1-2 months. 
    "We are applying maximum efforts to maintain our listing in
London, but given the recent, ninth sanctions package...the task
is not simple. Many service providers are reluctant even to
engage in dialogue about securing a listing after the move."
    The decision about changing the listing will be put to
shareholders and requires 75% approval. The European Union's
ninth sanctions package bars investment in Russia's mining
industry. 
    Polymetal has not been individually targeted with sanctions
imposed against Moscow, but has faced hurdles. 
    Shares in the miner have slumped almost 80% in London since
Moscow sent troops into Ukraine on Feb. 24 last year. According
to Nesis, its share of institutional investors has
"significantly decreased", although BlackRock  BLK.N  retains
around 7.5%. 
    Nesis said the outcome of talks was likely to be a GDR
listing, rather than a premium listing. 
    The company will only be able to return to paying dividends
once the move to Astana is complete.     
    He said sales have already been separated - the business in
Kazakhstan sells all its gold to the central bank, while in
Russia last year the majority of metal was sold to Asia. 
    But starting from 2023, Polymetal has returned to Russia's
rapidly growing domestic market with gold sales from its Russian
assets, Nesis said, and is not engaged in export. 
 (Reporting by Anastasia Lyrchikova; Writing by Alexander
Marrow; editing by Barbara Lewis)
 ((alexander.marrow@thomsonreuters.com))