Nordgold to Increase Ownership in High River Gold

on Nov 28, 2012

On November 27, Reuters reported that Russia’s third largest gold producer Nordgold (LON:NORD) was extending its share offer for increasing ownership of its Toronto-listed subsidiary High River Gold (TSE:HRG). The deal, which could see Nordgold owning approximately 87.9 percent of the issued and outstanding High River shares, is likely to pave the way for the Russian company towards a premium London listing.

Nord Gold Seeking Remaining 25 Percent in High River
In July, Nordgold, which is controlled by the Russian billionaire Alexey Mordashov, said that it would bid for the 25 percent of High River it does not already own. High River’s minority shareholders were offered 0.285 of Nordgold’s global depositary receipts (GDRs) or C$1.40 in cash per High River share. On November 27, the Russian gold producer announced that some 108 million shares of High River had been taken up under the offer, and that the offer was extended to December 8 so as to allow the remaining minority shareholders sufficient time to tender their shares.

“Based on the number of High River shares taken up under the offer to date, Nordgold believes it will have sufficient votes to approve a subsequent acquisition transaction,” commented Nordgold’s CEO Nikolai Zelenski, as quoted by Bloomberg, adding that the majority of High River investors “effectively already approved” the consolidation plan when they accepted Nordgold’s offer for the shares.

**Premium London Listing**
!m[The Russian Producer Seen As Moving Closer To Premium London Listing ](/uploads/story/919/thumbs/pic1_inline.png)Nordgold, which was spun off from Alexey Mordashov’s steel company Severstal (MCX:CHMF, LON:SVST), listed its GDRs in London in January 2012 as part of efforts to pursue an ambitious expansion strategy. Reuters reports that if enough shareholders swap their High River stock for paper in

Nordgold, the deal could prove to be crucial for achieving the 25 percent free-float which is required to move the Russian gold producer to a premium London listing. As noted by Bloomberg, Nordgold’s free float is expected to rise to 14.2 percent from 11 percent.
Reuters quoted Mr Zelenski as saying that the step to move from GDRs to a premium listing was not expected in the coming year and that the company was concentrating on resolving operational issues after a difficult first half.
Bloomberg reports that Nordgold GDRs went up by one percent to $4.90 by the close in London on November 27, their highest level since October 22. The 5,000 shares which traded were 23 percent of the three-month daily average.


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