Metals

Precious Metal Miner Polymetal Plummets After Scrapping Dividend

Polymetal shares fell 11.5 percent today after the Anglo-Russian precious metals mining company announced it was scrapping the full-year 2021 dividend due to dwindling cash flows and a lack of new sales channels. 

It also suggested cancelling the interim 2022 dividends “to allow the Group to strengthen its cash position and enhance its resilience in a highly volatile environment”. 

Future dividends will hinge on Polymetal’s capacity to free the 22 percent of blocked shares currently stored by the Russian National Settlement Depository (NSD), which was hit by EU sanctions earlier this year.

Polymetal has proposed an exchange offer to shareholders affected by the sanction bite on the NSD, whereby certificated shares are issued on a one-for-one basis.

However, the offer is subject to shareholder approval at a General Meeting on 12 October in London.

Since Russian President Vladimir Putin sent troops into Ukraine in February, Western sanctions have not directly targeted the mining company, which is 24 percent owned by Russian entrepreneur Alexander Nesis. 

Polymetal nevertheless faces a liquidity crisis and, out of necessity, is turning to the Central bank of Russia, meaning they receive roubles rather than US dollars.

By CityAM

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