Polymetal International to divest Russian business for $3.7bn amid strategic shift

Polymetal International plc, a leading mining company, has announced a significant divestment of its Russian business to JSC Mangazeya Plus for a staggering $3.69 billion. This strategic move, requiring shareholder approval, marks a pivotal shift in Polymetal’s focus towards its operations in Kazakhstan and represents a significant step in de-risking the company’s portfolio amid geopolitical tensions.

The divestment of Polymetal’s Russian operations is a calculated decision to mitigate risks and leverage growth opportunities in Kazakhstan, reflecting a strategic pivot to ensure the company’s long-term stability and shareholder value. The transaction is set to transform Polymetal, focusing on its Kazakhstani assets to foster a safer, more profitable future. This deal, valued at 5.3x EV/EBITDA based on adjusted EBITDA, underscores the company’s commitment to strategic repositioning and financial health.

The deal includes the transfer of 100% share capital of JSC Polymetal (Polymetal Russia) to JSC Mangazeya Plus, with the effective total consideration involving cash proceeds and the retention of significant net debt by Polymetal Russia. This strategic move is expected to enhance Polymetal’s liquidity and enable the financing of the Ertis POX development project, a significant step towards realizing the company’s growth ambitions in Kazakhstan.

The divestment by Polymetal International plc of its Russian business is a bold yet necessary step towards navigating the complex geopolitical landscape and focusing on regions with lower operational risks. This move not only reflects the company’s agile response to external pressures but also highlights a strategic foresight in optimizing its asset portfolio for sustainable growth. By redirecting focus towards its operations in Kazakhstan, Polymetal is poised to capitalize on new investment opportunities, ensuring a stable and prosperous future for the company and its stakeholders.