In reconnaissance with combat

Polyus Gold Holding is going to complicate its structure

Vladimir Potanin and Mikhail Prokhorov are expected to discuss today regarding structural changes in the Polyus Gold holding (according to their initial agreements, a controlling stake in the company as a result of the division of the business should go to Mr. Prokhorov, both businessmen are believed to own blocking stakes ). According to Vremya Novostey, at a meeting of the company’s board of directors the issue of an additional share issue of Polyus Gold’s 100% subsidiary, Polyus Geological Exploration, and the terms of placement will be discussed in favor of the “granddaughters” and “great-granddaughters” of Polyus Gold" in exchange for licenses. The initiator is Mr. Prokhorov’s team, which has a majority on the board of directors of Polyus Gold. In turn, Mr. Potanin’s team traditionally protests, since the proposed placement conditions will make it possible to create a system that will facilitate the withdrawal of assets.

Meanwhile, Deputy Prime Minister Alexei Kudrin, who heads the supervisory board of ALROSA, said last Friday that the diamond monopoly had suspended negotiations on the purchase of a stake in Polyus Gold: “ALROSA is not ready to participate in the transaction on the terms proposed by the sellers... For now There are no plans to continue negotiations in the near future." However, he did not rule out that the company will return to discuss the deal in the new year. It is quite possible that ALROSA expects that by that time the fate of Polyus Gold’s main assets will become more clear.

Now the licenses for the deposits are on the balance sheet of the “granddaughters” and “great-granddaughters” of Polyus Gold. Due to the existence of a 100% subsidiary, CJSC Polyus, the functions of the meeting of its shareholders (according to the legislation on joint stock companies and the company’s charter) are assigned to the general director of Polyus Gold, Evgeny Ivanov, an associate of Mr. Prokhorov, says a source close to to the company. However, in the holding’s development strategy, adopted last year, Mr. Potanin’s representatives wrote down a clause on the need to “straighten” the ownership structure in order to protect the rights of Polyus Gold’s minority shareholders. The currently proposed scheme for exchanging additional shares of Polyus-Geologorazvedka goes against this point.

According to sources close to both groups of shareholders, it is proposed to increase the capital of this company by 45 times, as a result of which Polyus Gold will directly control only 3% of the shares of Polyus-Geologorazvedka, and 97% of the shares through its “granddaughters” and "great-granddaughters". Thus, it turns out that upon completion of the exchange between Polyus Gold and the main gold mining assets, an extra link will be added in the person of Polyus Geological Prospecting (by the way, created by Mr. Ivanov).

Of course, Mr. Potanin is not satisfied with this development of events. After all, his team recently lost its majority on the board of directors of Polyus Gold, its chairmanship in this company’s management body, as well as the post of general director. And now, de facto, Mr. Ivanov has the right to unilaterally make decisions on the withdrawal of assets and major transactions. Why the decision to issue an additional issue of Polyus-Geologorazvedka shares and its terms is being brought up for discussion by the board of directors of Polyus Gold, sources in the companies do not say.

However, according to the law, the decision to issue an additional share issue must be made by three-quarters of the votes. Therefore, in order to achieve the goal, Mr. Prokhorov’s team needs to gain approval of the idea from independent directors. There are two of them in Polyus Gold - the chairman of the Union of Gold Miners of Russia Valery Braiko and the partner - the founder of The Policy Partnership Limited, Lord Patrick James Gillford. It is noteworthy that at the previous meeting of the board of directors, as a result of which Mr. Prokhorov managed to head the board and appoint his associate to the post of general director, Mr. Braiko, as sources close to Polyus Gold say, voted “for”, and Lord Gillford abstained. Thus, apparently, Mr. Braiko supports Mr. Prokhorov’s initiatives and today he will most likely vote for an additional share issue. If this happens, then, based on the composition of the board of directors, the fate of this project will be in the hands of Lord Gillford. At the end of last week, Mr. Ivanov was in London, where, according to some information, he met with him. How these negotiations ended, presumably, will become clear today. Mr. Ivanov, by the way, reported in London that Mr. Prokhorov had increased his stake in Polyus Gold to 30%.

Ivan GORDEEV