Ransom “the pole Gold” will help to pay for Kerimov-Polyus Gold

Ransom “the pole Gold” will help to pay for Kerimov-Polyus Gold

Earlier on Friday, “the pole Gold” declared the redemption of its own shares and American Depositary receipts (ADRs) totaling up to 255,298 billion.

MOSCOW, 11 Mar. The repurchase of shares “the pole Gold” will help billionaire Suleiman Kerimov, partly to pay for the consolidation of the parent company – Polyus Gold International Ltd, the analysts surveyed.

Earlier on Friday, “the pole Gold” declared the redemption of its own shares and American Depositary receipts (ADRs) totaling up to 255,298 billion. All can be purchased up to 33.14% of the shares and/or ADRs by price 4041,19 rubles and 2020,6 rubles per share, respectively (per share are two of the ADR).

The deadline for submission of bids, determined from 11 March to 27 may, although it may be extended by a decision of conducting a repurchase of a subsidiary “Polyus Gold” LLC “Polyus-invest”. Purchased paper, explained in “the pole Gold” can be used “for General corporate purposes, investment purposes and attract funding.”

The advertised purchase price of the shares, according to the company, includes a bonus 722,34 rubles, or 21,76% from the average weighted prices on the Moscow stock exchange for a period of three months. Premium on redemption of ADRs is estimated to be 7,4618 dollars or 35,60% from the average weighted price in the system of OTC trading in the United States.

More than 95% of actions “the pole Gold” owns Polyus Gold International Ltd, the main beneficiaries of which are the patterns of billionaire Suleiman Kerimov, first bought in 2009, Vladimir Potanin of 37.8% stake in the company, and at the end of 2015 konsolidirovanie (with the participation of the structures of the son of billionaire Kerimov said) almost 100% of the shares of the gold miner.

“The main purpose of buy back – “obesity” shareholders that they had received funding for their debt. Therefore a mystery to me why they did it at “the pole Gold” and not Polyus Gold, then wouldn’t have to do a public offering, which will be able to take the plight of minority shareholders”, — says senior analyst of the company “Aton” Andrey Lobazov.

“Buy back Kerimov need to reduce the debt, it’s obvious,” agrees with her colleague senior analyst BKS Oleg Petropavlovsky.

However, in his view, to the minority shareholders the proposal of special interest and poses. Shares “Polyus Gold”, in particular, at the close of trading on the Moscow exchange on Thursday was estimated at 4044 rubles per share. That is, the opportunity to participate in a buy back now brings additional profit to minority shareholders.

“It is not profitable, because the market price practically corresponds to the declared price of redemption. Instead of having to wait a month and a half until it’ll be easier to sell “in the market” if the price is satisfied,” explains Paul.

Joint intelligence and on the effects of the announced redemption of the company that, in their opinion, will be insignificant, despite a fairly impressive amount of the potential buy back. “Buy back, of course, increase the debt burden of Polyus, we estimate she will grow to two or two and a ponytail in the ratio Net debt/EBITDA,” calculated Lobazov.

“The ratio of Net debt/ EBITDA will rise to about two, which, in General, for “Poles” are not critical at current gold prices and the ruble exchange rate. If the ruble will be strengthened further, for them anyway, nothing critical should happen, because the company is practically the industry leader in profitability,” says Paul.

Polyus Gold is one of the world’s largest gold producers by market capitalization, volume of raw material base and production. The asset portfolio of the company includes ore and rossypnye deposits in Krasnoyarsk region, Irkutsk, Magadan, Amur regions and Yakutia. In 2015, Polyus gold increased gold production by 4% to 1,763 million ounces.

Thursday Polyus Gold published its financial results in 2015, according to which its net profit amounted to 1,119 billion against a loss of $ 182 million a year earlier, adjusted net profit increased by 47% to $ 901 million, adjusted EBITDA by 25% to 1,268 billion.

The company’s net debt on 31 December 2015 amounted to us $ 146 million, a decrease in the second half of last year by 2.6 times. Its ratio to adjusted EBITDA ratio decreased from 0.32 to 0.12 at the end of 2014.