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Enrc mulls possible split off of international assets by 123wert sdfsf
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Enrc mulls possible split off of international assets |
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Business,Business News,Business Opportunities
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LONDON (Reuters) - ENRC, one of the largest London-listed mining groups, isconsidering options to boost its value that include a possiblesplit of its international arm, comprising its mines in theDemocratic Republic of Congo, from its core Kazakh assets. Britain's Sunday Times reported that ENRC, which has been at thecentre of high-profile corporate governance rows in the past twoyears, is discussing plans to put the international division into anew London-listed company, and hand the shares to currentinvestors. ENRC said in a statement on Sunday that it was "determined todeliver value to its shareholders and continued to review allmethods to achieve this, including acquisitions, joint ventures andspin-offs". The miner, whose largest shareholders are its three foundinginvestors, its rival Kazakhmys and the Kazakh state, added: "Whilstthe company continues to evaluate various options, no decision hasbeen made." Credit Suisse and Morgan Stanley are advising ENRC on its optionsand the possible split. ENRC has long traded at a discount to the UK mining sector, notleast because of its controversial 2010 purchase of a Congolesecopper operation expropriated from rival First Quantum.
That was followed by a boardroom spat that pitted the foundingshareholders against some directors. One source familiar with the situation said carving off theinternational arm was one of several options on the table to closewhat key shareholders feel is an unfair valuation gap with thesector and to ensure billions spent on acquisitions are reflectedin its share value. But the source added it was too soon to say whether a demergerwould be the preferred option. ENRC is the largest iron ore mining and processing enterprise inKazakhstan, where it employs 65,000 people, and ferroalloys stillmake up the largest slice of its profit.
But it has diversified aggressively outside its original Kazakh andferroalloy business since 2008. It has snapped up assets in Brazil,Congo, Zambia and Mozambique, where, for example, its projects sitnear those owned by Riversdale, the coal miner bought by Rio Tinto in a $4 billion deal. Analysts have long said governance concerns have meant these assets- and others including development projects in Mali, South Africaand Zimbabwe - have effectively been undervalued. Key to the timing of discussions over a spin-off is a $1.25 billionsettlement with First Quantum earlier this year, which ended thelong-running dispute over the ownership of the Kolwezi project inCongo.
The demerger would be the largest corporate split in years, andcomes as cash-rich companies seek ways of protecting themselvesfrom unwanted predators, while potentially creating value forshareholders. Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. I am a professional writer from Lighters & Smoking Accessories, which contains a great deal of information about pvc corrugated pipe , radiant heating panel, welcome to visit!
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