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.