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Kazakh Kazakhmys enters into agreement on transfer of some assets

Business Materials 23 July 2014 17:07 (UTC +04:00)

Baku, Azerbaijan, July 23

By Elena Kosolapova - Trend:

Kazakhmys has entered into a definitive agreement to transfer certain of its mature assets in the Zhezkazgan and Central Regions of Kazakhstan to Cuprum Holding, a company owned by Vladimir Kim and Eduard Ogay, the company reported on July 23

"The agreement is subject to certain consents, approvals and conditions," the company said.

The parties have also entered into two Framework Services Agreements, enabling the Continuing Group and the Cuprum Holding Group to provide each other with transitional and longer-term services following completion.

Post-completion, the Continuing Group will continue to own the mining and producing assets in the East Region and the Bozymchak mine in Kyrgyzstan, as well as the Major Growth Projects, and it is proposed that the company be renamed KAZ Minerals PLC.

The Transaction will be conditional upon, inter alia, the approval of Shareholders and obtaining regulatory consents. In accordance with the Listing Rules, the approval of the independent Shareholders will determine the result of the vote.

Based on the terms of the Transaction, Kazakhmys will transfer the companies
owning the Disposal Assets to Cuprum Holding, along with a Working Capital
Payment, which comprises cash of $150 million, approximately $80 million representing the unspent amount of sustaining capital expenditure budget of the Disposal Assets for the period from January 1, 2014 up to July 31, 2014, the date of effective economic separation, certain MET and VAT refunds of approximately $10 million, to be received from the Government of Kazakhstan and due to the Disposal Assets, and any net cash flows attributable to the Disposal Assets for the period from the date of effective economic separation up to completion under the Share Transfer Agreement.

It is currently estimated that the total Working Capital Payment will be approximately $240 million, plus the net cash flows attributable to the Disposal Assets.

The deal is a part of Kazakhmys' program on group restructuring.

Kazakhmys PLC is a leading international natural resources group. It is the largest copper producer in Kazakhstan and one of the top worldwide with 16 operating mines, 7 concentrators and a copper smelter.

Edited by C.N.

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