Report: Polymetal focuses on dividends instead of buyback – CEO

MOSCOW, Jun 9 (PRIME) -- Russian gold producer Polymetal International is not interested in a share buyback, it focuses on paying up to 100% of its free cash flow in dividends instead, CEO Vitaly Nesis said in an interview to YouTube channel Alfa Dialog broadcast late on Tuesday.

“We do not plan a share buyback. We have regular consultations on that with the existing shareholders, with institutional investors located in the U.K. in the first place (which account for 60% of the shareholders). The majority of them react negatively to that,” he said.

Income funds account for more than 50% of the company’s shareholders that buy shares only to get regular dividends. Nesis is also one of the core shareholders of Polymetal, and he is also interested in dividends. “I will sit here and wait for the dividends, and I will get dividends in full later, and in full means full free cash flow,” he said.

Polymetal is also one of the two companies that avoided an increase of taxes on dividends in Cyprus to 15%. The company will still have to pay 5% as it is traded in the premium segment of the London Exchange and has no controlling shareholder due to a large free-float, Nesis said.

The company is not interested in changing registration from the Jersey Island on fears of losing the bulk of foreign shareholders, who for about 80% of capital, The remaining 20% are Russian investors, including those who control the shares through foreign companies. The company chose its ownership structure thinking about international institutional investors, he said.

“We need premium listing on the London Exchange for that, and we need to have jurisdiction for premium listing, which is the Jersey Island for us. But our headquarters are in St. Petersburg, and the bulk of our managing company works there,” he said.

Re-registering in the special Russian administrative region on the Oktyabrsky Island in the Kaliningrad Region is unacceptable for the bulk the company’s institutional shareholders, he said.

As of April 30, ICT Group of Nesis and his partners owned around 24% in Polymetal, while free-float exceeded 75%.

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