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Business news, 31.01.2007 13:05

Russia’s Largest Silver Producer Polymetal to Float in London in February

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Russia’s largest silver producer Polymetal will float its shares on the London Stock Exchange next month.

Shrugging off reports of investor fatigue with Russian companies, Polymetal, the world’s fifth biggest silver miner, plans to sell 30 percent of its shares in a simultaneous offering in London and Moscow.

The company has set a price range of $7.25-$9.50 per ordinary share and per Global Depository Receipt, valuing it at almost $3 billion if the upper range is achieved.

The sale is not, however, without controversy: Suleiman Kerimov, the 40-year-old billionaire politician who controls the company, was seriously injured in a car crash in the south of France last November and has not been seen in public since. Russian media report that he has returned to Moscow and is back at his desk but such claims have so far not been independently verified.

Polymetal’s prospectus concedes how dependant the company is on Mr Kerimov, a man estimated to be worth $7.5 billion by Forbes, making him Russia’s eleventh richest individual.

The prospectus was quoted by The Independent as saying: “Any event or circumstance affecting Mr Kerimov as a natural person, such as divorce, incapacity or death, may have an impact on the control over, and ownership of his interest in, the company, or may lead to a change of control.”

That statement prompted analysts to question the effective size of Mr Kerimov’s stake in Polymetal (thought to be 99.5 percent) amid reports that his wife and an unnamed oligarch may hold stakes too.

Polymetal itself is one of the crown jewels of Russia’s post-Soviet industrial complex.

Based in St Petersburg, it has three mines in Russia’s Far East and another in the Ural Mountains.

Last year it produced 17.3 million ounces of silver and 256,000 ounces of gold.

It has ambitious expansion plans but has been criticized for being heavily indebted and for locking itself into forward sales deals at prices that appear to be below market rates.

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