Polyus Gold International Ltd (PGIL) of tycoon Said Kerimov is in talks to sell 25% plus one share in the Russian largest gold producer to China’s Fosun Group for $2 billion.
A source reported that the negotiations were at an advanced stage, and the deal might take place in late 2016 or in early 2017. Fosun will have the right to veto large deals and one position in the top management, two seats in the board of directors and a right to nominate one independent director.
Two other sources reported that no strict terms of the deal had been defined, and talks with Fosun regarded a large array of issues: the Chinese group had already bought PGIL Eurobonds and might partake in a secondary public offering of the company.
Polyus plans to sell a 25% plus one share stake in the company after cancellation of treasury shares to Fosun, but it is unclear what stake will remain in PGIL’s hands.
Almost all PGIL shares were pledged to Sberbank as collateral under a $6 billion loan, which the company took to refinance a $5.5 billion loan taken from VTB Bank in 2015 to consolidate and delist shares of the company from the London Stock Exchange.
A source close to Sberbank reported that 90% in PGIL were still pledged to the bank and all deals with Polyus shares had to be coordinated with it. Sberbank declined to comment, but in January Polyus said that the company, PGIL and the bank reached an agreement on retention of shares. (Prime/Ukrainian metal)