Kazakhmys chairman offloads $1.3bn stake

The Business of Mining - thebusinessofmining.com | October 11, 2010 | 9:25 am Base Metals Copper 

“Vladimir Kim, chairman of Kazakhmys, has sold an 11 per cent stake in the London-listed Kazakh copper miner for $1.3bn in a transaction that could pave the way for the company’s secondary listing in Hong Kong.


Mr Kim, who led the privatisation of Kazakhstan’s biggest copper-mining complex before floating it in 2005, sold 58.9m Kazakhmys shares to Samruk-Kazyna, the Kazakh national investment company.

The sale is a transfer that injects no further liquidity into Kazakhmys’s closely held shareholder base. However, Mr Kim revealed that he would “make available” up to 21.4m shares, representing 4 per cent of Kazakhmys equity, for a Hong Kong listing. Mr Kim still owned 28 per cent of Kazakhmys after the sale, Kazakhmys said in a statement. He remains the company’s chairman and largest single shareholder.”

Source: Financial Times, October 5 2010

Observations:

  • Kazakhmys, a $2.4bln revenue copper, zinc, silver, gold producer, and ENRC (Eurasian Natural Resources Company), a $3.8bln revenue iron ore, aluminium and energy producer, are Kazakhstan’s largest mineral producers. Both companies are listed on the London Stock Exchange, but are largely owned by early investors and the Kazakh government. Furthermore, Kazakhmys holds 22% of the shares of ENRC.
  • Kazakhmys is planning to list on the Hong Kong Exchange with an additional 4%, worth approx. $0.5bln, to be closer to the main consumer market of copper. Mr. Kim still owns 28% of the shares.

Implications:

  • Mr. Kim was born in 1961 and has collected a $3.7bln fortune by developing Kazakhmys into the main copper producer in the area. It is stated his divestment of part of the ownership of Kazakhmys should help him to diversify his investment portfolio, which might imply that he is interested in buying a significant stake of another resources company in the region for which he sees opportunities to grow.

©2010 | Wilfred Visser | thebusinessofmining.com

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