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Capital Markets

Kazakhstan: Takeover wants to revive ShalkiyaZinc

Equity cure to indebtedness ills; Holding company looking to list subsidiaries

A Kazakh industrial company is investing $400 million over the next four years to bail out and revitalize the owner of the rights to the country’s biggest zinc deposit.

SAT & Co has made a capital investment in cash-strapped miner ShalkiyaZinc in a move that it is hoped will revive the indebted company’s fortunes.

Under the terms of the agreement SAT will inject $50 million into ShalkiyaZinc in return for an 81.39% stake of the company’s expanded share capital. SAT will pay $2.023 a share for 24.7 million or so new shares – equivalent to the trading average of ShalkiyaZinc’s London Stock Exchange-listed global depositary receipts in the previous six months. As a result the former majority shareholders, who held 74.45% of the issued share capital of ShalkiyaZinc, will be diluted down to 13.85%, while the GDR holders’ stake will be cut from 25.55% to 4.75%.

When the proposed transaction is completed SAT will submit a mandatory offer for the remaining 19% of outstanding shares in the company. Houlihan Lokey (Europe) is acting as financial adviser to ShalkiyaZinc, while Renaissance Capital is advising SAT.

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