Founders hit for $100m as ENRC dives into the red
ENRC's founding trio of major shareholders are collectively about $100m (£66m) out of pocket after a $1.5bn charge plunged the Kazakh-focused miner into the red last year.
The FTSE 100 copper, iron ore and aluminium group reported a $550m loss for 2012 against a $2.76bn profit in 2011, after rising costs and falling prices cut sales by 18 per cent to $6.32bn and forced the charge. ENRC scrapped its final dividend, meaning payouts for the year were just 6.5 cents a share, against 27 cents in 2011. ENRC's founders, Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, saw the full-year dividend on their 38 per cent stake plunge to $32m from $132m.
The miner is considering issuing new shares as it looks to cut $5bn of debts racked up after a six-year acquisitions spree.
Felix Vulis, chief executive, said he was in talks with investors over a possible share issue. He added: "We have five major shareholders. Their decision will be important for us to proceed. We, as a management, are fully committed to remaining in the FTSE 100, and that process has been started."
ENRC's $1.5bn charge included writedowns of $608m on the value of its aluminium unit in Kazakhstan, $240m on its Boss copper and cobalt mine in the Democratic Republic of Congo, and $96m from Chambishi, the Zambian copper and cobalt smelter acquired in 2010. It also wrote down $120m from the value of its 13.5 per cent stake in Johannesburg-listed Northam Platinum, and booked a $328m charge related to a now-unprofitable contract to supply alumina to Rusal in Russia.
Mr Vulis said: "2012 was a challenging year for the group, with deteriorating prices having materially impacted our earnings."
Shares in ENRC fell by 5.8p, or 2 per cent, to 306.9p.
- 1 Tourist films plane's descent just metres above packed Caribbean beach
- 2 Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
- 3 World Book Day: Boy 'excluded' from school after dressing up as Fifty Shades' Christian Grey
- 4 Bad Jews poster 'censored' on London Tube
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Tourist films plane's descent just metres above packed Caribbean beach
Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
Isis 'bulldozes' Nimrud: UNESCO condemns destruction of ancient Assyrian site as a 'war crime'
Professor Brian Cox brands astrology-believing Tory MP David Tredinnick an 'outlier on the spectrum of reason'
Lynch mob kills suspected rapist in India after dragging him naked for four miles through city
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
End of the licence fee: BBC to back radical overhaul of how it is funded
Elif Shafak: Turkish author warns against rise of British nationalism
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...