Through the divestiture of its Russian unit, Polymetal International aims to focus on its operations in Kazakhstan
Polymetal to divest its Russian unit to Mangazeya Plus in $3.69bn deal. (Credit: Polymetal International plc)
Kazakhstan-based Polymetal International has agreed to divest the company’s Russian business to Mangazeya Plus in a deal valued at $3.69bn.
Through the divestiture of its Russian unit, Polymetal International aims to focus on its operations in Kazakhstan.
Besides, the deal will enable appropriate valuation of the company’s Kazakhstan assets and ensure de-risking and de-leveraging of the group’s operations in the country.
Polymetal International’s Russian portfolio includes eight producing assets and four major development projects including Amursk Pox-2, Veduga, Viksha, and Prognoz.
The company’s operations in Russia include Dukat Hub, Omolon Hub, Amursk Pox, Mayskoye, Voro, Nezdha, and others.
According to the agreement, Polymetal International will retain access to the Amursk POX processing facility to treat Kyzyl refractory concentrate until the Ertis POX in Kazakhstan becomes operational.
Polymetal International will receive $300m in net post-tax cash proceeds from the transaction. The company’s board intends to utilise the fund to finance the Ertis POX development project as well as to enhance the company’s liquidity profile.
The transaction comes as a result of a review initiated by the company’s board after the commencement of the Russia-Ukraine conflict in February 2022.
Polymetal International group CEO Vitaly Nesis said: “The Board, the Special Committee and the management team of the Group are set to deliver on our commitment to restore shareholder value and re-set Polymetal’s strategy by selling the Russian business of the Group.
“A quick, transparent, and sanctions-compliant exit under the terms of the proposed Transaction serves the interests of all stakeholders.
“The completion of the divestment will allow the Group to de-risk the Company’s business, deliver stable cash flows and pursue new investment opportunities. The Board recommends shareholders to vote for the proposed resolution.”
Subject to certain preceding conditions such as regulatory and shareholder approvals, the transaction is expected to be completed by the end of next month.