Anglo-Russian Polymetal plans to delist from LSE and redomicile to Kazakhstan’s AIFC

Anglo-Russian Polymetal plans to delist from LSE and redomicile to Kazakhstan’s AIFC
Polymetal dumpers at Kyzyl in Kazakhstan. / Polymetal
By bne IntelIiNews May 11, 2023

Anglo-Russian precious metals miner Polymetal on May 11 asked its shareholders to back a plan to delist from the London Stock Exchange (LSE) and to redomicile to Kazakhstan’s Astana International Financial Centre (AIFC).

Gold, silver and copper miner Polymetal is headquartered in Jersey, which Russia has listed as an “unfriendly country” amid the West’s response to the Ukraine war that started with a Russian invasion in February last year. The US, UK and EU, as well as Canada, Switzerland, Australia and Japan, have each gradually placed sanctions on certain Russian persons, entities and sectors. That triggered counter-sanction measures from Moscow, such as the sanctioning of persons and entities within jurisdictions on the “unfriendly countries list”.

Polymetal’s share price plunged nearly 28% on May 10.

“The board is of the view that the redomiciliation is a necessary and critical step to preserve shareholder value. In determining that the redomiciliation to the AIFC is the preferred alternative, the principal focus of the board has been on the removal of as many Russian counter-sanction restrictions as possible, in a legal forum that offers shareholders as much similarity to the status quo as possible,” Polymetal stated.

The company said it assessed Dubai International Financial Centre, Abu Dhabi Global Market and Hong Kong as alternatives to the AIFC.

If shareholders support the redomiciliation in Kazakhstan, in a scheduled May 30 vote, Polymetal will be unable to comply with certain basic requirements for the ordinary shares in the company to continue to be admitted to LSE main market trading. The company said that it had made efforts to meet requirements, using depository interests or depositary receipts, but that these attempts were not successful.

Polymetal—which has eight gold and silver mines in Russia and two in Kazakhstan—would have to request a suspension of trading on the LSE following any move to Kazakhstan, but the company said it was still exploring the possibility of listing on additional exchanges.

The past year has brought reports that Polymetal was considering carving out the “operationally good” Kazakh assets from the “reputationally bad” Russian assets.

In its seventh sanctions package in response to the invasion of Ukraine, the EU joined the gold imports embargo that was adopted in June 2022 by the US and G7 economies

Russia was the fourth-largest exporter of gold in the world, with the yellow metal being its next biggest export after energy, having brought in $18.9bn revenues in 2020.

The EU’s ninth sanctions package, adopted last December, bans new investment in the Russian mining sector.

Polymetal posted a $288mn net loss for 2022 versus a $904mn profit in 2021. Revenues declined by 3% y/y to $2.8bn due to lower average gold and silver prices, while increased logistics and other costs decreased Ebitda by 31% y/y to $1bn.

Polymetal reported gold-equivalent (GE) production of 345 000 oz for 1Q23, down 5% y/y.

Revenue moved up by 19% to $733mn, with the company taking advantage of higher gold prices.

With the release of the first-quarter results, the company confirmed its full-year guidance of 1.7mn ounces of GE.