The major stakeholders of the company, Vladimir Kim and Oleg Novachuk, are going to increase their own shares in KAZ Minerals and buy minority shares through Nova Resources B.V.
Investment company Nova Resources B.V. offers £6.4 ($8.3 or 3.579 tenge) per share. This price represents a 12% premium to the price of trades closing on October 27. The market value of the company is estimated at £3 billion ($3.9 billion or 1.67 trillion tenge).
According to Interfax, Nova is attracting a loan from VTB to finance the buyout.
The acquisition will be carried out by an arrangement scheme that requires the approval of a majority of voting shareholders holding 75% of the shares, excluding shares owned or controlled by Vladimir Kim and Oleg Novachuk, KAZ Minerals explained.
As of October 1, Kim and Novachuk owned 38.71% of KAZ Minerals shares, according to KASE data.
Novachuk noted that the company has made notable progress as a public company since its listing on the London Stock Exchange (LSE) in 2005.
«However, given the current uncertainty in the market and corporate circumstances surrounding some of the projects in progress, we believe that the long-term interests of KAZ Minerals will be best served as a private company,» said Novachuk, head of Nova Resources.
The presentation, posted on the company’s website, specifies that “projects in progress” is the Baimskaya copper project in Russian Chukotka. KAZ Minerals acquired the field in 2018 for $900 million from Aristus Holdings Ltd, owned by Roman Abramovich and his partners. This year in June, KAZ Minerals increased the estimated capital budget of the project from $5.5 billion to $7 billion.
The general meeting of Kaz Minerals shareholders is expected to take place in December 2020 or early in January 2021. The completion of the transaction is scheduled for the first half of 2021.
As of 4:20 pm Nur-Sultan time, one share of Kaz Minerals on the LSE has risen by 9.67% up to 626 British pence. On the Kazakhstan Stock Exchange (KASE), the company showed growth by 8.92% to 3.310 tenge.
As the company reported earlier, in the first half of 2020 KAZ Minerals increased its net cash flow from operating activities by 31% up to $310 million. Sales volume after the first half of 2020 amounted to $991 million. For comparison, in the first half of 2019 it amounted to $1.052 billion.
Due to the decline in copper prices, the group’s operating income decreased by 12.9%, to $357 million. Income before tax was $249 million, which is 13.8% less than in the January-June period last year; net income for the period decreased by 13.2% to $197 million, with earnings per share based on basic earnings of $0.42 ($0.48 in the first quarter of 2019).
KAZ Minerals, one of the leading copper producers in Kazakhstan, also produces zinc, silver and gold as by-products. The group includes several enterprises in Kazakhstan, as well as a gold-copper mine in Kyrgyzstan. The largest co-owners of KAZ Minerals as of October 1, 2020, were Kazakhstani billionaire, co-owner of Kazakhmys Corporation Vladimir Kim (31.06%) and another local businessman Oleg Novachuk (7.65%).
