MOSCOW, Nov 3 (PRIME) -- Polyus Gold International Ltd (PGIL) of tycoon Said Kerimov is in talks to sell 25% plus one share in the Russian largest gold producer to China’s Fosun Group for U.S. $2 billion, Kommersant business daily reported on Thursday quoting sources.
A source told Kommersant that the negotiations are at an advanced stage, and the deal may take place in late 2016 or in early 2017. Fosun will have the right to veto large deals and one position in the top management, two seats in the board of directors and a right to nominate one independent director.
Two other sources told the business daily that no strict terms of the deal have been defined, and talks with Fosun regard a large array of issues: the Chinese group has already bought PGIL Eurobonds and may partake in a secondary public offering of the company.
Polyus plans to sell a 25% plus one share stake in the company after cancellation of treasury shares to Fosun, but it is unclear what stake will remain in PGIL’s hands.
Almost all PGIL shares were pledged to Sberbank as collateral under a $6 billion loan, which the company took to refinance a $5.5 billion loan taken from VTB Bank in 2015 to consolidate and delist shares of the company from the London Stock Exchange.
A source close to Sberbank told Kommersant that 90% in PGIL are still pledged to the bank and all deals with Polyus shares have to be coordinated with it. Sberbank declined to comment, but in January Polyus said that the company, PGIL and the bank reached an agreement on retention of shares.
Fosun and Polyus declined to comment.
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