Russian gold miner UGC's board approves 14% share issue, no plans for SPO at present

MOSCOW. April 25 (Interfax) - The board of directors at Uzhuralzoloto Group (UGC) on Thursday approved a 14% increase in authorized capital by issuing 30 billion new shares, the Russian gold miner said.

"This is a technicality and, according to Russian legislation, one that is needed to approve the prospectus for a securities issue which would be valid for 12 months. This ensures flexibility when deciding on a deal," UGC said.

The company has said repeatedly that it could in time conduct an SPO to bolster liquidity and join the IMOEX index, for it will need a free float of 10%, however it has not given any specific plans or dates. IB Sinara said a 180-day lock-up period would expire on May 22, "and the company is likely to conduct an SPO."

UGC said on Thursday, though, that there are "no plans for an SPO at the moment!"

UGC's shares accelerated their losses on the Moscow Exchange following the share issue announcement. They were down as much as 4.9% at one point but just 1.1% by 12:20 local time.

UGC is one of Russia's biggest gold miners. It has two hubs - Urals, in the Chelyabinsk region, and Siberia in the Krasnoyarsk territory and Khakassia. Konstantin Strukov the biggest shareholder. The free float is around 6%.