Severstal to spin off Nordgold by end of Jan. 2012

Russia’s largest steelmaker Severstal plans to spin off its gold mining unit Nordgold by the end of January 2012, the company said in a statement on Wednesday.

Under the separation scheme, Severstal’s subsidiary Lybica Holdings B.V. (Lybica), a full Nordgold owner, will exchange its 100 percent stake in Nordgold for Severstal shares and GDRs held by Severstal’s existing shareholders and GDR holders.

“The transaction reflects a desire among our shareholders for Severstal to focus on its core strengths while also providing an opportunity for them to retain an interest in an established pure-play gold producer,” the statement quoted Severstal Chairman Chris Clark as saying.

The exchange ratio for the deal is 100 Severstal shares or GDRs for 186 Nordgold shares and/or GDRs, after giving effect to a planned 2:1 reverse stock split of Nordgold shares. One Nordgold GDR represents one Nordgold share, the statement said.


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