Polyus Gold will return to the London Stock Exchange two years after delisting due to sanctions imposed against Russia.
Polyus Gold, Russia’s biggest gold mining company, was one of many from the region to pull out of the London Stock Exchange back in 2015. This followed the West’s decision to impose sanctions against Russia as a result of the annexation of Crimea.
Due to the tensions, Moscow called for companies to delist from foreign exchanges. Many obliged, believing that poor relations could result in falling prices. However, with tensions improving, many companies are now rethinking their decision.
Polyus Gold to return to London Stock Exchange
Polyus Gold announced on Monday that they would be re-joining the exchange. 7% of the company’s shares will be offered to investors. However, this will be split between London and Moscow.
The decision came just days after the announcement that China’s Fosun Group had agreed to pay $890 million for a 10% stake in the company. Although, this could rise to 15% over the next 12 months at a cost of $490 million.
The 11% rise in the price of gold has attracted the interest of Chinese investors in recent months. However, despite the sale, Suleyman Kerimov will remain the company’s majority stakeholder with a share of 82%.
Polyus Gold expects to raise $400 million from the offering, with 7% of the company valued at $700 million based on current prices. The company will use the money raised to pay off debts and finance its growth plans.
The $9.9 billion company already dominates the Russian gold market. However, they hope to take control of the global market over the next few years.
Production has increased by 19% since 2014 and they aim to increase their yield by another 44% by the end of 2019. Should they reach their target, they would become the fourth biggest gold miners in the world, up from eighth.