Gazprombank entity buys 22% of Russian gold miner UGC from company president

MOSCOW. Dec 23 (Interfax) - AAA Capital Management, part of Gazprombank Group , has acquired 22% of shares in Uzhuralzoloto Group of Companies (UGC) from the company's president and main shareholder, Konstantin Strukov.

Strukov will use the after-tax funds received from the deal to fully pay off the debt obligations of the related parties of which UGC is the guarantor, UGC said.

UGC was acting as guarantor for credit lines of related parties for 30 billion rubles as of the end of June. But 10 billion rubles of this was repaid on July 10, under a loan agreement between Gazprombank and MelTEK, a coal company associated with the Strukov family, and the guaranteed amount had decreased to 22.9 billion rubles, according to UGC and MelTEK materials.

A 22% stake in UGC is worth around 36.1 billion at the latest share price on the Moscow Exchange .

"An investor entering the capital of UGC, as represented by one of our country's largest investment companies, confirms the attractiveness of UGC's investment history and provides a high assessment of our company's prospects. Terminating the obligations for which UGC acts as a guarantor, along with gradually reducing UGC's own debt, should substantially strengthen the company's credit profile," Strukov said in the statement.

AAA Capital Management is expected to nominate one of the nine members for the UGC board of directors.

Strukov remains the largest shareholder in UGC with a 67.85% stake and free float is 10.15% upon completion of the transaction.

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.