Polymetal sells its Russian business for $3.7 billion to avoid nationalization risk

Polymetal sells its Russian business for $3.7 billion to avoid nationalization risk

Polymetal, a leading precious metals miner, has agreed to sell its Russian unit to a subsidiary of Mangazeya Mining, a Russian mining company, for $3.7 billion. The deal is driven by Polymetal’s desire to exit Russia and reduce the risk of nationalization or other forms of expropriation, the company said on Monday.

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Polymetal International plc will sell JSC Polymetal, or Polymetal Russia, to JSC Mangazeya Plus, an entity established by Mangazeya Group for the purpose of the transaction. Mangazeya Group is owned by Sergey Yanchukov, a Russian businessman and politician.

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The deal values Polymetal Russia at 5.3 times its enterprise value/EBITDA, Polymetal International said. The transaction is subject to several conditions, including shareholder approval.

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Polymetal Russia was designated by the U.S. Department of State in May 2023, which refers only to the Russian unit of Polymetal International, the company said. The designation was part of the U.S. sanctions against Russia for its alleged interference in the 2020 U.S. presidential election and its involvement in the Ukraine conflict.

Polymetal International said that the sale of its Russian business will allow it to focus on its assets in Kazakhstan and Armenia, where it sees more growth opportunities and less political risk. The company also said that it will use the proceeds from the deal to pay down debt, return cash to shareholders, and pursue new projects.

Source : The Wall Street Journal


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