- Polymetal shares slump as it forges ahead with Kazakhstan move
- Almost certain to result in de-listing from London
- Move seen as crucial to escape sanctions and counter-sanctions linked to Ukrainian conflict
Russian and Kazakh gold miner Polymetal (POLY) saw its share price battered as it confirmed plans to move its domicile from Jersey to Kazakhstan to escape sanctions and counter-sanctions from the ongoing conflict in Ukraine.
For investors, the bottom line seems to be an almost certain de-listing of its stock from the London market.
Having more than halved in early trading, the shares were down 26% by mid-morning. The shares are down more than 80% since Russia’s invasion of Ukraine in February 2022, having previously occupied a position in the FTSE 100.
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Polymetal CEO Vitaly Nesis told a briefing for analysts and investors: ‘Moving to a neutral jurisdiction (as opposed to one like Jersey considered unfriendly by the Russian government) is absolutely necessary to avoid catastrophic destruction of value.
‘Getting the share price to pre-war levels is not achievable but we believe the current share price does not even reflect the value of the Kazakh part of the business.’
OUT OF OPTIONS
Nesis added that the re-domicile of the company is a crucial step in resuming dividends. The company said it did look to pursue options like depository interests and GDRs (Global Depository Receipts) to maintain a listing in London but were unable to find a willing provider to support either of these two instruments beyond a six-to-nine-month period.
While the company still needs regulatory approval for a de-listing, which may require an additional meeting to approve its exit from London, it is forging ahead with a meeting to approve the move set for 30 May.
The process is expected to complete by 17 July when its shares will join the Astana International Exchange, or AIX for short, and its UK listing will be suspended.
There are no UK brokers which facilitate trading on the AIX, though Polymetal has highlighted one European broker which would facilitate custody and sale of the shares – Wood & Co – as well as two Kazakh brokers, Halyk and Freedom Finance.
Today’s share price reaction suggests many investors will not want to deal with these levels of complexity and have concluded they are best off cutting their losses.
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