Russia's largest steelmaker Severstal confirmed on Monday it plans an Initial Public Offering of its gold division but declined to provide any details of the flotation.
The Financial Times said Severstal is preparing to list its gold division in London this year in a deal expected to value the business at about $4 billion. Severstal, majority owned by Alexei Mordashov, a close ally of Prime Minister Vladimir Putin, plans to retain a 65-70 percent stake in the company.
Nomura analysts have valued Severstal at $3.6 billion, while one of the bankers, taking part in the deal, said the price could rise to $4-5 billion.
The company's gold division consolidates several mines in Russia, Kazakhstan, Burkina Faso, Guinea and several geo-exploration projects in these regions.
Severstal plans to raise its annual gold output to one million ounces by 2013, and produce about 640,000-670,000 ounces in 2010.
Morgan Stanley, Credit Suisse and Troika Dialog have been appointed lead managers for the deal.
CNN
