Russian precious metals miner Polymetal International, which recently moved its listing to the London Stock Exchange, will pay about $200 million to buy out 8.6 percent of shares held as treasury stock by its Russian unit, its CEO said. It could then use the cash to pay for acquisitions, Chief Executive Vitaly Nesis told Reuters by telephone on Friday.
"We are effectively paying this money to ourselves," Nesis said. Nesis said the company was looking at small miners in the countries of the former Soviet Union on expectations that global financial turmoil would reduce price expectations and cut off other sources of funds.
"Sellers' appetites have shrunk," Nesis said. Polymetal International, the British vehicle which brought the Russian miner to the London stock market, last month secured 491 million pounds ($780 million) in a share sale and came a step closer to joining the FTSE-100 index.
It must now buy out a total of 16.7 percent of shares in the Russia unit, including 8.6 percent held as treasury shares. Nesis said the formal offer would be made on November 22-23. The money could also be used to repay debt or fund capital investment, Nesis said. Polymetal, owned by tycoons Alexander Nesis and Alexander Mamut with Czech investor PPF, is the first of three Russian miners seeking to enter FTSE 100 index. The other two are Polyus Gold and steel maker EVRAZ.