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Polymetal International Plc to Sell Russian Unit for $3.69 Billion

Overview of the Deal

Gold miner Polymetal International Plc has announced that it will sell its sanctioned Russian unit to Russian firm Mangazeya Plus in a deal worth a total of $3.69 billion. The completion of the sale is expected to be marked for the end of March. As part of the deal, Polymetal is anticipated to receive $300 million in cash after tax, which includes third-party debt and intra-group arrangements.

Background and Context

Following the invasion of Ukraine and the subsequent sanctions, Polymetal redomiciled from Jersey to Kazakhstan in order to unblock international payments, including dividends, from Russia. The US sanctions on the St. Petersburg-based unit prompted Polymetal to seek a buyer for the assets, which represented 70% of its revenue last year.

Despite the geopolitical tensions and the exodus of some multinational companies from Russia, Polymetal’s decision to sell its Russian unit is a significant move in the current business landscape. The company’s actions are in line with other instances of major business owners divesting their assets in the region.

Deal Structure and Financial Details

Payments under the deal will be denominated in rubles, with a dividend of nearly $1.43 billion before tax being paid to the Kazakh company. Polymetal plans to use about $1.15 billion of this amount to pay off intragroup debt and interest to the Russian company. Additionally, the transaction value includes $2.2 billion of net debt retained by Polymetal Russia, while the buyer will pay $50 million in cash to the Kazakh company upon completion of the deal.

Impact on Operations and Stakeholders

Polymetal intends to continue using the Amursk POX processing facility in Russia to process gold concentrate until it constructs its own plant in Kazakhstan. The company is also engaging with US authorities to ensure that this arrangement does not lead to secondary sanctions. The sale to Mangazeya Plus, a part of a Russian group controlled by entrepreneur Sergey Yanchukov, was backed by the Omani government-owned fund, which became a major Polymetal shareholder in January.

How AI legalese decoder Can Help

The AI legalese decoder can assist in understanding the legal and regulatory complexities involved in cross-border M&A transactions such as the sale of Polymetal’s Russian unit. By processing and deciphering legal jargon and language specific to different jurisdictions, the AI legalese decoder can provide valuable insights into the legal implications, compliance requirements, and potential risks associated with such deals. This can enable companies and stakeholders to make informed decisions and navigate the intricate landscape of international business transactions more effectively.

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Conclusion

The sale of Polymetal’s Russian unit for $3.69 billion marks a significant development in the company’s strategic realignment and response to geopolitical and regulatory challenges. The deal structure, financial details, and impact on operations underscore the complexity and multifaceted nature of international business transactions in the current global context. As businesses navigate an increasingly complex and dynamic legal landscape, AI-powered tools like the legalese decoder can offer invaluable support in deciphering intricate legal language, mitigating risks, and ensuring compliance in cross-border deals.

Updates with deal details starting from the second paragraph.

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