Severstal, Russia's biggest steel maker, is set to spin off its Nord Gold unit and could list the standalone business in London, less than a year after being forced to pull a planned $1.5bn (£968m) public offering. A London listing for Nord Gold would raise the profile of the gold unit and allow it direct access to funding.
It would follow a wave of Russian companies that have listed in London or are seeking premium listings with inclusion in the FTSE 100 index.
Severstal, 82 per cent owned by Russia's second-richest man – Alexei Mordashov – aims to complete the separation by late January. It is planning for a swap and potential listing of Nord Gold global depositary receipts – effectively a certificate of foreign ownership of a Russian domestic share.
The steel maker had planned to float the gold unit earlier this year, using cash raised to pay off debt owed to the parent company and to fund further growth. It cancelled the offering in February, blaming poor market conditions that it felt meant investors would be underpaying for Nord Gold assets.
Nord Gold was set up in 2007 and has spent more than $1bn buying mines in Africa and Kazakhstan, building a group with expected 2011 output of up to 840,000 ounces, rivalling Randgold and Russian peer Polymetal. Nord Gold has signalled it would continue monitoring acquisition opportunities even without a London listing.