KAZAKHMYS PLC (United Kingdom) wants to sell an up-to-50 % share in Ekibastuz GRES-1

10.12.09, 16:04
/KASE, December 10, 09/ - KAZAKHMYS PLC (London), listing on the Kazakhstan Stock Exchange (KASE), provided KASE with a press-release: Quotation begins Kazakhmys PLC ("Kazakhmys" or the "Group") announces that, further to the announcement made on 13 October 2009, the stake to be sold in its Ekibastuz GRES -1 ("Ekibastuz") power plant, to the National Welfare Fund Samruk-Kazyna JSC ("Samruk-Kazyna"), will increase from 25% to 50% (the "Transaction"). The consideration will increase from $339 million to $681 million. On 13 October 2009, Kazakhmys announced the sale of 25% of Ekibastuz to Samruk-Kazyna. Following further negotiations, the size of the stake to be sold has been increased to 50%. This transaction is in keeping with the original memorandum signed and announced in October 2008, to develop a strategic partnership at Ekibastuz with Samruk-Kazyna. The consideration of $681 million will be payable in cash and will primarily be used by Kazakhmys to repay debt. The transaction is subject to certain regulatory consents and approvals. As Samruk-Kazyna is owned by the Government of Kazakhstan, which is a significant shareholder in Kazakhmys, this is a related party transaction and is therefore subject to the approval of shareholders of Kazakhmys. A Circular providing additional detail on the Transaction will be sent to shareholders by the end of December ahead of a General Meeting to be held in January to approve the Transaction. As part of the negotiations with Samruk-Kazyna, it was agreed that Kazakhmys would receive the proceeds from the Transaction by the year end, in advance of completion. Transfer of title, however, will not happen until all regulatory consents and approvals have been obtained. Kazakhmys and Samruk-Kazyna will create a joint supervisory board following the Transaction. Management positions will alternate between Kazakhmys and Samruk-Kazyna every five years. In the first five years following the transaction, Kazakhmys will appoint the management team whilst Samruk-Kazyna will appoint several key oversight positions. As stated in October 2009, the Board believes that partnership with Samruk-Kazyna will enhance the value of Ekibastuz by providing a closer relationship with the Bogatyr mine (jointly owned by Samruk-Energy JSC and UC Rusal) which supplies approximately 80% of Ekibastuz's coal requirements. The strategic partnership is also expected to further support the upgrading of the Ekibastuz power station, while providing greater integration with Kazakhstan's generation and transmission programmes. The full year EBITDA and profit before tax attributable to Ekibastuz, as derived from its IFRS audited financial statements, was $86.7 million and $35.3 million, respectively, for the year ended 31 December 2008. As at 30 June 2009, Ekibastuz had gross assets of $1,535 million. The Transaction implies a gross valuation for the Ekibastuz power plant of $1,362 million. For details, contact: Kazakhmys PLC John Smelt Corporate Relations Tel: +44 20 7901 7882 Tel: +44 78 7964 2675 Ayrin Barton Financial Analyst Tel: +44 20 7901 7814 Zulfira Mukhamediarova Media Relations Tel: +77 27 266 3317 Merlin David Simonson Tel: +44 20 7726 8400 Tom Randell Tel: +44 20 7726 8400 Leonid Fink Tel: +44 20 7726 8400 Ends The full version of the press release is available at the KASE website at http://www.kase.kz/files/emitters/GB_KZMS/gbkzms_reliz_101209.pdf [2009-12-10]