* Slides to 2012 statutory loss of 62 pence per share
* Scraps final dividend
* EBITDA down 45 percent to $1.89 billion
* Renegotiates debt with Sberbank to ease pressure
By Clara Ferreira-Marques
LONDON, March 20 Kazakh miner ENRC took
a higher-than-expected $1.5 billion charge on weak aluminium
prices, troubles in platinum and the impact of reshuffling
operations in Africa, dragging it to a loss in 2012.
The company also scrapped its final dividend, in the face of
a tough second half last year, as costs remained high and prices
for key commodities including iron ore fell sharply.
London-listed ENRC is battling to restructure a business
that grew from its Kazakh base with a more than $5 billion
acquisition spree over the past six years and is now struggling
with swollen debt. Spending costs last year were more than
double the cash ENRC generated.
The company said on Wednesday it was considering unspecified
"non-debt financing options", which could include a capital
increase or asset sales. It said it had renegotiated the terms
of loans from Russia's Sberbank, one of its two main lenders,
allowing itself more headroom.
But ENRC, majority-owned by a core group of 5 shareholders,
also wants to boost its "free float" of readily tradeable
shares, which is under 19 percent, to stay in the FTSE 100 blue
chip index. New rules from next January require FTSE 100 members
to have a free float of at least 25 percent.
Sources with knowledge of the matter have said the company
has been considering a $500 million capital increase to tackle
both the debt - more than $5 billion at the end of last year -
and the need to have more shares available for sale.
Key shareholders are said to be reluctant.
"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," Chief Executive Felix Vulis said.
Chairman Mehmet Dalman later told analysts that the key
concern was the free float and not the company's balance sheet,
thanks to new credit facilities and improved Sberbank terms.
Also holding up plans for a share increase are questions
around the content of two internal investigations following
whistleblower allegations of wrongdoing. The first of the two,
focused on Kazakhstan, has been filed with UK authorities but
the company said it was "comfortable" with the content and
planned no action against specific executives.
The second investigation is directed at the company's
international operations, mainly Africa.
ENRC did not comment further.
ENRC warned last month that it would take a significant
writedown and on Wednesday revealed an impairment charge of $1.2
billion, largely due to a deteriorating aluminium market, weak
platinum and the reshuffling of copper projects.
It took a $328 million provision because of a
now-unprofitable alumina supply contract with Russia's RUSAL
that runs until the end of 2016.
ENRC is the latest large miner to write down the value of
boom-year deals as falling prices bite: weak platinum and
aluminium prices also hit Anglo American, Rio Tinto
and BHP Billiton.
ENRC said there could be further impairments if market
conditions deteriorated, specifically for copper.
Weak metal prices and stubbornly high costs in Kazakhstan
and elsewhere also ate away at ENRC's core profit, with earnings
before interest, tax, depreciation and amortisation (EBITDA)
down 45 percent to $1.89 billion, at the lower end of forecasts.
The company posted a basic loss per share of 62 cents,
compared with earnings per share of $1.53 in 2011.
It also scrapped a final dividend payment, leaving a
full-year payout ratio of 16 percent, based on its interim
dividend. ENRC said it remained committed to a 15-20 percent
ENRC shares, down by a quarter since a 2013 peak in
February, were down 2.5 percent at 1103 GMT, underperforming a
0.4 percent drop in the broader mining index.