Russian metals and mining giant Severstal plans to hold an Initial Public Offering (IPO) on its gold mining division, worth around $4 billion, on the London Stock Exchange by the end of 2010, the Financial Times said on Tuesday.
Severstal plans to retain a 65-70 percent share in the new company, the paper said.
This week, the financial services group Nomura estimated Severstal's gold business at 3.6 billion dollars. One of the bankers involved in the IPO told the paper the value could in fact be as high as $4-5 billion.
U.S. bank Morgan Stanley, Swiss bank Credit Suisse and Russian bank Troika Dialog are organizing the transaction, the paper said.
Severstal refused to comment on what it called "market rumors and press speculation."
Severstal is Russia's largest steel producer with enterprises in Russia, the United States, several EU countries and Ukraine. Around 82 percent of all shareholder capital is controlled by company CEO Alexei Mordashov. The remaining 17.63 percent belongs to institutional investors and company employees.
The company's gold mining assets include mines and exploration projects in Russia, Kazakhstan, Burkina Faso and Guinea. It produced 534,000 troy ounces of gold in 2009.
Severstal's plan until 2013 projects gold production reaching 1 million troy ounces. This year's production is forecast at 640,000 - 670,000 troy ounces.
MOSCOW, September 21 (RIA Novosti)
