MOSCOW, Jan 17 (Reuters) - Nord Gold, a unit of mining giant Severstal, on Monday announced its intention to float at least 25 percent of its shares in London to raise cash to repay debts to its Russian parent and fund future growth.
The company, which generated $485 million in revenue in the first nine months of 2010, expects to be valued at around $5 billion, a financial markets source told Reuters.
The IPO is expected to complete in February, the source added.
The shares will be sold by Lybica, a wholly owned subsidiary of OAO Severstal incorporated in The Netherlands, which is also expected to grant an over-alloútment option of up to 15 percent of the global offer.
'The primary proceeds are to be used to repay the net amounts of loans outstanding to OAO Severstal and to fund Nord Gold's growth strategy of exploration, development of projects and potential acquisitions,' the company said in a statement.
Nord Gold, which operates in West Africa, Russia and Kazakhstan, plans to increase its gold output to 1 million ounces by 2013 from around 589,000 in 2010.
Severstal's plans for Nord Gold IPO follow steel pipe maker ChelPipe, pump manufacturer HMS Hydraulic and coking coal producer KOKS in announcing plans to raise cash in London since Russia came back from its January public holiday last week.
(Reporting by Polina Devitt; Writing by Toni Vorobyova; Editing by Louise Heavens) (antonina.vorobyova@reuters.com; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The company, which generated $485 million in revenue in the first nine months of 2010, expects to be valued at around $5 billion, a financial markets source told Reuters.
The IPO is expected to complete in February, the source added.
The shares will be sold by Lybica, a wholly owned subsidiary of OAO Severstal incorporated in The Netherlands, which is also expected to grant an over-alloútment option of up to 15 percent of the global offer.
'The primary proceeds are to be used to repay the net amounts of loans outstanding to OAO Severstal and to fund Nord Gold's growth strategy of exploration, development of projects and potential acquisitions,' the company said in a statement.
Nord Gold, which operates in West Africa, Russia and Kazakhstan, plans to increase its gold output to 1 million ounces by 2013 from around 589,000 in 2010.
Severstal's plans for Nord Gold IPO follow steel pipe maker ChelPipe, pump manufacturer HMS Hydraulic and coking coal producer KOKS in announcing plans to raise cash in London since Russia came back from its January public holiday last week.
(Reporting by Polina Devitt; Writing by Toni Vorobyova; Editing by Louise Heavens) (antonina.vorobyova@reuters.com; Tel: +7495 7751242, Reuters Messaging: antonina.vorobyova.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.