Glencore maintains plans to list Kazzinc
ASTANA. May 16 (Interfax) - Glencore International, which expects to complete its IPO on the London Stock Exchange (LSE) next week, is considering a separate listing for gold ore miner Kazzinc, the Independent reported, citing sources.
The Financial Times made a similar report last summer, saying Glencore plans to realize about $5 billion from the listing.
Glencore owns 50.7% of shares in Kazzinc, its biggest gold mining asset.
In the prospectus for its IPO, Glencore says it will spend $3.2 billion to boost its stake to 93%. "Glencore's stake in Kazzinc may be further increased to 99.4% through the exercise of a put or call option in respect of Verny Investments' remaining 6.4% interest in Kazzinc, which is conditional on amongst other things, an initial public offering of Kazzinc's gold assets." Glencore will pay $1 billion of the purchase price out of the proceeds from the IPO. It will pay the remainder in tranches in the October-December 2011 period.
But Glencore will have to deal with Kazakh opposition leaders who claim that Kazzinc's privatization was illegal and want an investigation into its provisions.
Kazzinc is a major integrated zinc producer which also produces byproduct copper, precious metals and lead. Kazzinc expects to produce 700,000 oz of gold in 2011.
Verny Investments Holding was established in 2006. Funding is derived from the group's largest investment and exit to date, ATF Bank of Kazakhstan, sold to Unicredit for approximately $2.2 billion in June 2007. The fund is chaired by Timur Isatayev and Bulat Utemiratov is considered to be its owner.
Glencore, the world's largest commodities trader, has a portfolio of production assets, including 8.75% if Russian aluminum giant Rusal and between 40% and 49% of several upstream subsidiaries of RussNeft .
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