Steel giant Severstal said that enough minority shareholders agreed to swap the steelmaker shares for the securities of its gold-mining unit Nord Gold paving the way for the unit’s London listing later this week.

Severstal said in a statement investors tendered a total of 20.3 million Severstal securities which represent about 10.6% of Nord Gold stock, above the 5% threshold required for the gold miner split-off.

The deal will result in Nord Gold becoming the country fourth-largest gold producer and will allow both companies to focus entirely on their core businesses.

The statement said the swap of Nord Gold Global Depositary Receipts owned by the steelmaker subsidiary Lybica for Severstal GDRs is slated for Wednesday to be followed by the gold miner’s listing on the London Stock Exchange on Thursday while the exchange for Severstal ordinary shares is scheduled for late January.

Severstal majority owner Mr Alexei Mordashov will acquire Nord Gold remaining stock that wasn’t taken up in the swap to bring his stake in the gold miner to 89.4%.

Mr Alexei Kulichenko Severstal chief financial officer said “We view the results of the exchange positively it’s in line with our expectations.”

He said that the number of minority shareholders participating in the exchange proves that it was a fair option.

Mr Nikolai Zelensky chief executive of Nord Gold said “The free float of more than 10% is a good starting point. We thank the investors that initially invested in the steel production business and chose to become Nord Gold shareholders. It’s an indication of trust that I’m sure we’ll justify.”

Mr Andrei Tretelnikov an analyst at Rye Man & Gor Securities said Nord Gold split-off brings the company’s valuation to about USD 2.7 billion compared with USD 3 billion to USD 4 billion ahead of last year IPO.

He said that “That means the company has a potential for growth. But it has yet to prove its operational efficiency and the ability to fulfill the ambitious plans it has set.”

Mr Zelensky said as an independent company, Nord Gold plans to continue increasing output. The company targets production of 800,000 to 850,000 ounces of gold this year.

He said that the gold miner which focuses primarily on emerging markets is also considering acquisition options in Russia and other markets including Africa.

(Sourced from www.sptimesrussia.com)