Kazakhstan's Metallurgical Corporation Kazakhmys has entered into an agreement to sell the group's remaining 50 percent interest in Ekibastuz LLP and 100 percent of the issued share capital of Kazhydro to Kazakh Samruk-Energo, the company reported on Dec. 9.
"Based on the terms of the transaction, Kazakhmys will receive net proceeds of approximately $1.249 billion in cash, which will substantially strengthen the Group's financial position during the development phase of the group's major copper growth projects, Bozshakol and Aktogay," Kazakhmys said.
The Board believes that the transaction provides the group with an opportunity to realize an attractive return on its investments in Ekibastuz and Kazhydro, and is in line with the group's previously announced strategy of focusing on its core copper business.
The transaction will be conditional upon, inter alia, the approval of a majority of independent shareholders and on the approval of the relevant governmental authorities in Kazakhstan.
The principal asset in the transaction is Ekibastuz GRES-1, which is the largest power station in Kazakhstan. The power station currently has a capacity of 3,000 MW. It is expected to generate 13,000 GWh of net power in 2013. Currently Ekibastuz LLP is owned equally by Kazakhmys and Samruk-Energo.
Kazakhmys is a leading international natural resources group with significant interests in copper, gold, zinc, silver and power generation. It is the largest copper producer in Kazakhstan and one of the top worldwide with 16 operating mines, 10 concentrators and two copper smelters.
Samruk-Energo is a wholly-owned by Kazakh Government through Samruk-Kazyna Sovereign Wealth Fund.