Heady gold price entices Russian mogul to IPO

2 minute read

Severstal co-owner Alexey Mordashov is pictured in Moscow, Russia, February 7, 2018. REUTERS/Sergei Karpukhin

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LONDON, June 3 (Reuters Breakingviews) - For Russian tycoon Alexey Mordashov, toppy gold prices are too good to pass up. The steel magnate ally of Russian President Vladimir Putin will take Nord Gold, the gold miner he owns with his sons, public in London after it was delisted in 2017. Last year, despite keeping production flat, Nord Gold reported a 52% increase in adjusted EBITDA to just over $1 billion thanks to rising prices of the yellow metal. If valued in line with peer Polyus (PLZL.MM), which trades at 9 times trailing EBITDA, according to Refinitiv, Nord Gold could be worth almost $10 billion.

Mordashov knows the good times may not roll forever. Inflation expectations have driven worries over when the Federal Reserve will raise interest rates, which would make holding gold relatively less profitable. The other concern is the risk of Mordashov one day getting sanctioned. But that’s a constant worry that oligarchs close to the Kremlin must manage. Pulling the trigger makes sense now. (By Dasha Afanasieva)

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