The London initial public offer of Nord Gold PLC, a Russian owned gold miner also focused on Africa and Kazakhstan, has been postponed amid criticism over whether it would contravene HM Treasury’s plan to block certain flotations on security grounds.
The company, also known as Nordgold, said late on Tuesday that its planned £3.5bn initial public offer has been postponed.
This is a month after Chancellor of the Exchequer Rishi Sunak unveiled plans to block certain companies from listing on the stock market on the grounds of national security, following a kerfuffle over the flotation of oligarch Oleg Deripaska’s EN+ four years ago.
Nordgold is wholly owned by Russian oligarch Alexey Mordashov and his sons Kirill and Nikita, who have arranged meetings with dozens of UK-based investment groups ahead of their plans to float around 25% of the company.
The Times reported that the IPO has been criticised by trans-Atlantic foreign policy and national security think tank The Henry Jackson Society.
“After the chancellor pledged to clean up the City’s reputation as the oligarch’s listing destination of choice, this listing ... makes a mockery of this whole endeavour,” the think tank said.
Risk warnings in Nordgold’s Listing documents say that the company or Mordashov could face sanctions after the billionaire was placed on an American government list of Russian oligarchs in 2018.
Nord Gold chief executive Nikolai Zelenski said: "Recent central bank comments indicating an acceleration in expected interest rate rises have created significant uncertainty and volatility in the resources sector, in particular impacting gold and gold equities.
"Nordgold has determined that it would therefore not be sensible to pursue an IPO at this particular juncture. I would like to thank the many prospective shareholders for their interest and support over the last four weeks.
"Although we have decided to postpone our IPO, our priorities remain the same - delivering on our low cost, low risk development pipeline anchored in the Gross District and continuing to drive shareholder returns, without ever compromising on our adherence to the highest ESG standards, or the safety of our people, and the values that are core to Nordgold."
The shares were being offered to institutional and professional investors by main sponsor Citigroup and bookrunners JP Morgan, VTB Capital, BMO Capital, Credit Suisse, Gazprombank and Renaissance Securities, supported by Bacchus Capital Advisers and with broker Peel Hunt also additionally acting as lead manager for the share offer.
Alexey Mordashov owns 35% of the company with his sons both each owning stakes of 32.5%.