Nord Gold to raise $1 billion with London listing

Nord Gold yesterday became the fourth Russian company in recent days to unveil plans for a London listing. With this, the stage is now set for a $1 billion floatation in the backdrop of robust commodity markets.

The gold producer is expected to achieve a market capitalisation of about $5 billion, with the raised amount going towards repayment of debt owed to Nord Gold's parent, the Russian mining giant Severstal and for funding its growth strategy.

The company earned $485 million in revenues in the first nine months of 2010.

The share listing would see a quarter of the company on offer, and from the sale proceeds, about $300 million would be invested back in the business. The offering is expected to net $1 billion as per market sources. Around $200 million of the listing proceeds would be used to pay off loans.

Nord's plans follow listing announcements by a number of Russian companies, including pump manufacturer HMS Hydraulic Machines and coking coal and pig iron group KOKS. Steel pipe specialist Chelpipe also launched its initial public offering last week, as it sought to raise up to $1billion with the listing of its ordinary shares in Moscow and global depository receipts in London.

Chairman Philip Baum, who leads Nord Gold's board, is a  veteran of the FTSE 100-listed mining giant Anglo American. "We will strive to ensure that investors benefit from attractive earnings growth whilst protected by the highest standards of corporate governance," Baum said.