Stocks & stats Back
En Ru
  • Gold (USD) 1,297.00 +4.90
  • MOEX (RUB) 4,450.00 -150.00
  • LSE (USD) 38.10 -1.05
1,968 koz of gold
produced in 2016 (2015: 1,763 koz)
389 $/oz
Total cash cost per ounce sold
572 $/oz
All-in sustaining cash cost
Ore processed, kt
24,824 2015
26,445 2016
Adj. EBITDA $ mln
1,278 2015
1,536 2016
6 6 operating assets: 5 hard-rock mines and alluvial operations
2,458 $ mln
Total Revenue in 2016
0.12
Lost time injury frequency rate (LTIFR) per 200k hours worked in 2016 (2015: 0.08)
Factsheet
Press Releases

Transaction with Fosun

PJSC Polyus

PJSC Polyus (MOEX — PLZL) («Polyus», or the «Company»), the largest gold producer in Russia, notes the announcement made earlier today by Polyus Gold International Limited («PGIL») that it has entered into an agreement to sell 12,561,868 of the ordinary shares in the Company that it currently owns, representing 10 per cent. of the Company’s share capital excluding treasury shares (the «Initial Stake») at $70.6025 per share (the «Initial Stake Price») to a consortium (the «Consortium») led by Fosun International Limited (HKSE:00656) («Fosun»). In addition to Fosun, the Consortium includes Hainan Mining Co., Ltd («Hainan Mining») and Zhaojin Mining Industry Company Limited («Zhaojin Mining»), both partially owned by Fosun.

As part of the agreement, PGIL also granted the Consortium an option to acquire, subject to completion of the acquisition of the Initial Stake, up to an additional 5 per cent. of the Company’s share capital at $77.6628 per share («the Option Exercise Price), exercisable not later than May 31, 2018.

The consideration for the Initial Stake acquisition values the Company’s equity at approximately $9,005 million on a 100% fully-diluted basis (the «Entry Valuation»). The Option Exercise Price represents a 10 per cent. premium to the Entry Valuation valuing the Company’s equity at approximately $9,906 million on a fully-diluted basis.

The completion of the Initial Stake transaction is expected to occur before the end of 2017 and remains subject to certain conditions, including receipt of governmental approvals. The Consortium has already obtained preliminary approvals from certain governmental authorities.

The Initial Stake Price is subject to a completion adjustment for dividends paid per share during the period between transaction signing and completion. The Option Exercise Price is not subject to any adjustment for dividends.

Following completion of the Initial Stake transaction and exercise of the option the shareholding structure is expected to be as set out in the table below.

Shareholding Structure1

SHAREHOLDERS % of Share Capital % of Share Capital Pro-forma
after (i) Initial Stake Transaction after (i) Initial Stake Transaction and (ii) Exercise of the option
PGIL2 91.73 81.88 76.73
Fosun-led Consortium 0 9.853 15.00
Treasury 1.51 1.51 1.51
Free float 6.76 6.76 6.76

The agreement also provides for minimum annual dividend payments by the Company to all shareholders for the years 2017-2021 (the «Mandatory Dividends») at the greater of (i) 30% of the full-year EBITDA calculated based on IFRS accounts and (ii) $550 million for each of 2017, 2018 and 2019 and $650 million for each of 2020 and 2021. Dividends will be paid semi-annually. Should the amount of dividends actually paid by the Company for any relevant year be less than the Mandatory Dividend for such year, any dividend shortfall (net of the amount of dividends paid in excess of the Mandatory Dividend in respect of prior years) will accumulate and will be payable together with the Mandatory Dividend or regular dividend for the following calendar year(s). After 2021, dividends will be paid in line with the Company’s existing dividend policy, which provides for payment of dividends in the amount equal to 30% of adjusted EBITDA, subject to the Company’s net debt/adjusted EBITDA ratio being lower than 2.5x.

Pavel Grachev, Chief Executive Officer of PJSC Polyus, commented:

«We welcome Fosun and its consortium members as strategic long-term shareholders of the Company. Fosun is a leading investor from China with a global footprint and a commitment to disciplined value investing. We look forward to our partnership with Fosun, as we continue our efforts to build on our position as a top 10 gold producer globally with the lowest cost and a focus on long term, sustainable growth. This transaction also dovetails with Polyus’ strategy of focusing on shareholder value creation as a public company.»

Wang Qunbin, Executive Director and Chief Executive Officer of Fosun Group, commented:

"We are delighted to enter into this agreement to acquire a significant stake in Polyus. We have long been impressed by the skills and vision of Polyus’ management team and Board of Directors, with its focus on operational excellence and prudent cost control as evidenced by its leading cost position in the industry. As a strategic, long-term shareholder, we are excited to support Polyus as it delivers on one of the most exciting growth profiles amongst the global peer group while providing an attractive dividend yield on our investment.«

As part of the agreement, PGIL and the Consortium agreed to vote in favor of amending the Company’s charter to increase the number of members on the Board of Directors from the current 9 to 11, and to maintain at least 3 independent non-executive directors. Unless there are representatives of other third party shareholders elected to the Board and subject to certain other conditions, the Consortium will be entitled under the agreement to elect two nominees to the Board of Directors, for so long as the Consortium holds at least 10 per cent. of the share capital, and one nominee if the Consortium’s holding is between 5 per cent. and 10 per cent.

The agreement provides the Consortium with customary corporate governance and anti-dilution protections, including veto rights over reorganizations, liquidations, reduction of the dividends payable under the Company’s dividend policy, related-party transactions and buybacks. There are additional veto rights if dividends are not paid in accordance with the agreement.

The agreement provides for certain restrictions with respect to disposals by the Consortium members of their interest in the Consortium, as well as restrictions with respect to conversions into depositary receipts. In addition, the Consortium agreed to certain voting undertakings and certain restrictions with regard to acquisitions and disposals of Polyus’ shares (including in the event of any potential future offering) after completion of the transaction.

PGIL and the Consortium committed to cooperate to ensure the Company complies with the requirements of the Moscow Exchange where its ordinary shares are listed, as well as the requirements of foreign exchanges where the Company’s equity securities may be listed in the future.

PJSC Polyus

PJSC Polyus (www.polyus.com) is the largest gold producer in Russia and one of the top 10 gold miners globally by ounces produced. The Company also holds the fourth largest mineral resources base in the world.

Polyus group’s principal operations are located in Krasnoyarsk, Irkutsk and Magadan regions and the Sakha Republic (Yakutia).

In 2016, the Company confirmed its status of one of the lowest-cost gold producers globally.

Polyus Gold International Limited

Polyus Gold International Limited (a Jersey company) is the principal shareholder of PJSC Polyus owning 91.73% of PJSC Polyus ordinary shares.

Fosun Group and Fosun International Limited

Fosun Group was founded in 1992 in Shanghai. Fosun International Limited (HKSE:00656) was listed on the main board of the Hong Kong Stock Exchange on July 16, 2007. As at December 31, 2016, Fosun’s total assets exceeded RMB480 billion and is principally engaged in three business segments of health, happiness and wealth.

Enquiries:

Investor Contact
Victor Drozdov, Director Investor Relations
+7 (495) 641 33 77 drozdovvi@polyus.com

Media contact
Victoria Vasilyeva, Director Public Relations
+7 (495) 641 33 77 vasilevavs@polyus.com

Forward looking statement

This announcement may contain «forward-looking statements» concerning Polyus and/or Polyus group. Generally, the words «will», «may», «should», «could», «would», «can», «continue», «opportunity», «believes», «expects», «intends», «anticipates», «estimates» or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to future capital expenditures and business and management strategies and the expansion and growth of Polyus’ and/or Polyus group’s operations. Many of these risks and uncertainties relate to factors that are beyond Polyus’ and/or Polyus group’s ability to control or estimate precisely and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Polyus and/or any Polyus group company assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.



1Assumes sale of the Initial Stake and the exercise in full of the option to acquire an additional 5 per cent. of share capital, but no other transactions for the sale of shareholding by PGIL nor changes in share capital of the Company.

2Mr. Said Kerimov indirectly controls 100% of PGIL.

3Represents 10 per cent. of the Company’s outstanding share capital (i.e., excluding treasury shares)