Russia’s Severstal to spin-off gold unit in $4-bn London IPO: report
23 Sep 2010
Russia's largest steelmaker Severstal is planning to spin-off its gold division through an initial public offering (IPO) in London, joining the league of other precious metals miners like Africa Barrick Gold and Mexico's Fresnillo Plc who are also listed on the London Stock Exchange, Financial Times reported yesterday.
In a recent assessment, Nomura reported the worth of Severstal's gold business between $3 billion and $3.6 billion. However, bankers close to the situation value it up to $4 billion.
It is believed that Severstal, majority held by Russian billionaire Alexei Mordashov, will retain a 65 to 70-per cent stake in the IPO.
Cherepovets-based Severstal is the country's largest steel producer with a $13 billion turnover and a production of 16.7 million tonnes in 2009.
The company has mineral resources in Russia, Kazakhstan, the US, Burkina Faso, Liberia, and Guinea producing iron ore, coal, and gold. Severstal has a large 11.9 million tonne integrated steel mill in Cherepovets, about 350-km north of Moscow, and also has steel production facilities in the US.
The steel major established its gold business in 2007, and has gold mining and exploration assets spread over Russia, Kazakhstan, Burkina Faso, and Guinea.