Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Kazakhmys to Sell Power-Producer Stakes for $1.3 Billion

Don't Miss Out —
Follow us on:

Dec. 9 (Bloomberg) -- Kazakhmys Plc, Kazakhstan’s largest copper miner, agreed to sell two power producers to the nation’s sovereign wealth fund for $1.3 billion to protect loan accords.

The transaction will generate net cash proceeds of about $1.25 billion, bolstering Kazakhmys’s finances at it develops the Bozshakol and Aktogay copper mines, it said today in a statement. The sale removes any risk that the company may breach covenants on loans, it said.

Since 2009, the board of London-based Kazakhmys has focused on its main mining operations to cut costs and rein in spending. The company is among commodity producers across the world to divest non-core assets after a slowdown in demand for metals and minerals dragged down prices, squeezing profit margins.

Kazakhmys will sell its remaining 50 percent interest in Ekibastuz LLP, which owns the Ekibastuz Gres-1 power plant, and all of Kazhydro to Kazakhstan’s Samruk-Kazyna fund, according to the statement. The company bought Ekibastuz in 2008 and sold a 50 percent stake to Samruk-Kazyna for $681 million in 2010.

Kazakhmys fell 2.1 percent to 213.3 pence at the close in London today, valuing the company at $1.6 billion.

The company’s loans include a $1 billion pre-export facility secured against its copper contracts, from which it has withdrawn $500 million, and a $200 million undrawn revolving credit facility.

Kazakhmys appointed China Nonferrous Metal Industry’s Foreign Engineering & Construction Co. as a second contractor for its Bozshakol project to ensure the mine starts in 2015, it said in a separate statement. It said the total budgeted cost of the project will rise by about $350 million.

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.