Kazakhmys chairman Vladimir Kim has sold nearly a third of his stake in the company to the Kazakh government for about $1.3bn (£818m), sparking concerns about increasing government involvement in the copper producer.
Kim sold about 11 per cent of the London-listed company to diversify his investments ahead of a possible secondary listing next year in Hong Kong, the firm said yesterday.
Shares in Kazakhmys – the world’s 10th biggest copper producer – fell 2.8 per cent to 1,383p, making it the second biggest loser in the blue chip FTSE 100 index.
“We think the market will see two negatives from the announcement: the state’s increasing control of the business, and Mr Kim being a seller at current levels. As a result we expect profit taking in the near-term but see no change to the underlying investment case,” Liberum Capital said in a note.
Evolution Securities cut its rating on the stock to “Reduce” from “Add” with a price target of 1,290p.
Kim reduced his stake in the company to 27.9 per cent from 38.9 per cent, selling the shares to the government’s national welfare fund Samruk-Kazyna. He sold the shares on the Kazakh stock exchange for the equivalent of 1,423p each, Monday’s closing price in London.
Kim agreed not to sell any more shares for 12 months, except for a stake representing four per cent of the company which would be available to promote liquidity during a possible secondary listing in Hong Kong next year, it said.
A listing there would be natural since the region is important for the company. Kazakhmys sells the bulk of its products there and it has formed a joint venture with China’s Jinchuan Group.
VLADIMIR KIM KHAZAKHMYS
VLADIMIR Kim, aged 50, has long been a cornerstone of Khazakh commerce. He joined an embryonic form of Kazakhmys in 1995, as the government was privatising the country’s industries. He was the chief executive of one of its component companies, JSCZ, before taking the chair at Kazakhmys in September 2005 when the firms merged.
His close ties to Kazakhstan hit the headlines this summer, after pressure group Global Witness claimed his links with the government could clash with shareholder rights, though the company insisted its disclosure regime was vigorous.
Kim was listed 247th in Forbes’ rich list earlier this year, with a personal fortune of $3.7bn (£2.33bn). The Sunday Times also named him as the 14th richest UK resident.
Kim serves on the board of Eurasian Natural Resources Company (ENRC), another FTSE 100 miner with a focus on Kazakhstan. He bought a 25 per cent stake in ENRC from its founders in 2006, but this has slimmed down to around 15 per cent since ENRC’s London float.
The two firms have regularly been subject to merger gossip – but now that Kim has reduced his stake in Kazakhmys to 27.9 per cent, the possibility is even more remote.
City A.M. Reporter