Another representative of large businesses in the Chelyabinsk region conducted the IPO procedure – the initial public offering of shares on the open market so that investors could buy securities. “Yuzhuralzoloto Group of Companies,” one of the largest Russian gold producers owned by Konstantin Strukov, announced the start of trading in ordinary shares on the Moscow Exchange.
Additional shares were issued for placement on the exchange. The demand for securities was so high that the capital to be placed was increased to 7 billion rubles. The IPO saw participation from several dozen funds and 70 thousand individual investors, who became company shareholders.
During the first two days of trading, the company’s shares rose 5.4% compared to the offering price. The total trading volume reached 3.6 billion rubles. The shares available for free float will represent approximately 6% of the increased authorized capital.
“Yuzhuralzoloto approached the IPO well-prepared,” says Artem Kletskin, Financial Director of Yuzhuralzoloto. “We already had three bond issues traded on the stock exchange, and a certain circle of investors was familiar with us, which helped in the IPO. We anticipated high demand, but the actual figures exceeded our expectations. As a result, we decided to increase the supply to meet the demand of institutional and retail investors.”
The largest institutional investors accounted for about 50% of the offering, while the company aimed for a balanced shareholder structure, with retail investors also holding around 50% of shares.
Yuzhuralzoloto used the funds raised during the IPO to repay its loan obligations.
“We are pleased with the results,” explains Artem Kletskin. “Throughout the company’s history, we have been working towards this step – making an IPO on the stock exchange. We have allocated 7 billion rubles to reduce our debt load, saving us about 1 billion in interest payments annually. Gradually reducing our debt level and servicing costs is an important prerequisite for potential dividend payments shortly. Our goal is further growth in the company’s capitalization.”
By December 25, the shares of Yuzhuralzoloto had grown by approximately 15%. Notably, the company did not require stabilization, for which 1 billion rubles had been allocated. These funds will be used to reduce debt and for general corporate purposes.
Following the IPO and the issuance of new shares, the company’s market capitalization reached 117 billion rubles. The company has already approved a plan to increase capitalization, which includes achieving growth in gold production through the Siberian group of deposits, engaging actively with the investment community, and implementing a stable dividend policy. The company intends to allocate at least 50% of net profit for shareholder payments.
Additionally, it plans to have its shares included in several indices of the Moscow Stock Exchange to attract funds from institutional investors focused on stock exchanges.