Kazakhgold agrees $9bn Polyus deal

Kazakhgold has agreed a $9bn reverse takeover with its parent company Polyus Gold in a deal that will create the largest gold producer in eastern Europe.

Kazakhgold struck an agreement with Polyus’s main shareholders, Mikhail Prokhorov and Suleiman Kerimov, to buy 74 per cent of its shares in exchange for Kazakhgold global depositary receipts.

The combined group will have yearly gold production of 1.3m ounces proven, and probable gold reserves of 74m ounces. Mr Prokhorov will retain his chairmanship of the company.

Kazakhgold will exchange 9.2 of its GDRs for each Polyus share, and will combine the merged investor base of the company under a single London Stock Exchange GDR listing, both companies said in a statement.

Polyus is currently the controlling shareholder in Kazakhgold after purchasing a 50.1 per cent stake in 2009.

Kazakhgold said it would launch a $100m equity capital raising of new shares and depositary receipts at a price of $1.50, which had been delayed from last year.

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