On April 7, shareholders of Polyus Gold (RTS: PLZL), the largest Russian gold producer, voted at the EGM against election of a new BoD and abstained from making amendments to the company’s charter. The Polyus Gold’s EGM was held on Monday morning, the quorum was 72.2%. According to Polyus’s announcement, suggestions on amendments to the charter was not supported by the necessary 75% of votes: only 58% of shareholders that participated at the EGM voted for this decision. The overwhelming majority of the shareholders, 96.19%, voted against the early termination of the current BoD’s authorities.
"The voting results are indicative of high confidence in the current BoD on the part of the company’s shareholders and their support of the development strategy implemented by the company," said Polyus general director Evgeny Ivanov. However, an interesting decision was adopted in respect to the second issue put on the agenda, related to amendments to the company’s charter, which should have considerably constrained the BoD’s authorities. In particular, Interros proposed to make amendments to the Polyus’s charter to force the BoD to make decisions by 2/3 of the votes, but not by the majority of the votes (the majority in the current company’s BoD belongs to Onexim). Interros suggested introducing a clause to the company’s charter that the BoD’s meeting agenda could be changed only by unanimous decision of all elected BoD members. Additionally, Interros proposed to supplement the BoD’s authorities with the ability to make bargains for more than RUB 500 mn, adopt decisions on issues related on the acquisition or termination of sub-soil assets usage rights, including Polyus’s participation at auctions for acquisition of such rights, and decisions on release of such rights. However, the ex-partners failed to find common ground on the issue. As a result, Onexim abstained from voting and the decision was not made.
In our opinion, the fact that Onexim abstained from making amendments to Polyus’s charter is indicative of the Group’s unwillingness to lose control over the company, and it is quite possible that the story with geoexploration assets spinoff into a separate company would continue in the nearest future.
We estimate the current fair value of Polyus Gold’s shares at USD 59 per share, a 14% upside to the current market valuations.
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