Russia’s wealthiest man is plotting to list a second company in London to take advantage of a Covid-era gold rush.
Alexey Mordashov’s mining giant Nordgold is set to become the latest in a string of blockbuster floats that have taken the London Stock Exchange by storm this year.
Nordgold will join the bourse’s main market in a premium listing this summer and is expected to be valued at £3.5billion.
High profile: Russia’s richest man Alexey Mordashov backs the Moscow-based Bolshoi theatre (pictured)
The company was on the LSE until 2017 when Mordashov, 55, took it private – claiming its £920million market value at that time was far too cheap.
But since then gold prices have soared, and last night hit the highest level in five months at $1,871 an ounce.
It is the second major listing Mordashov has on the London stock exchange, following on from steel giant Severstal which went public in 2006.
While many will cheer another multi-billion float, others in the City have reservations. Many of Russia’s oligarchs have made their fortunes through natural resources – but their companies have sometimes raised eyebrows when they have joined the LSE.
London-listed aluminium producer EN+ suffered when it was hit by US sanctions imposed on a number of Russian firms after the country was blamed for the attempted assassination of dissident Sergei Skripal and his daughter Yulia in Salisbury in 2018.
The group had to agree to reduce the stake of Russian tycoon and former company president Oleg Deripaska, who had been targeted because of his close links to the Kremlin.
And unlike fellow oligarachs, such as Everton-investor Alisher Usmanov and Chelsea-owner Roman Abramovich, little is known about Mordashov although his wealth far outstrips their fortunes.
According to Forbes, Mordashov and his family were listed as the richest in Russia by Forbes earlier this year with an estimated £20.5billion fortune.
While publicity-shy, the father-of-seven’s life is also glitzy.
As well as a private jet he owns two luxury yachts, the £355million Nord and the much smaller £40million Lady M.
Through his steel behemoth Severstal, from which Nordgold was spun off, he is a high-profile sponsor of Russia’s Bolshoi and Mariinsky theatres.
Outside of the realm of heavy industry and the arts, his family also owns a 30 per cent stake in Anglo-German travel giant Tui.
And like Usmanov, Abramovich and Deripaska he is a self-made man.
Mordashov’s mother and father were both steel mill workers in Cherepovets, a city in Vologda Oblast in western Russia.
After attending university in St Petersburg he went back to Cherepovets and took a job at the same steel plant where his parents had worked.
Alexey Mordashov’s mining giant Nordgold is set to become the latest in a string of blockbuster floats that have taken the London Stock Exchange by storm this year
He quickly rose up the ladder and was put in charge in 1996 at the age of 30. But his reputation has been shaped by an oft-repeated story that about how he treated his mentor at the mill, Yuri Lipukhin.
Lipukhin requested Mordashov establish a subsidiary to buy up shares in the company so it would not fall into the hands of an outsider.
Mordashov did – but then bought most of the shares himself, forcing his former boss to sell his stake at a fraction of its market value.
He then turned Severstal into one of Russia’s most valuable steel companies and was chief executive until 2015.
He also ploughed full steam ahead into other sectors, including power generation equipment, through his group Power Machines.
Mordashov – who studied for an MBA at Northumbria University – also says he is driven by ‘a passion to create value’ and says he is, at heart, a manager rather than a businessman.
He says he ‘fell in love’ with the Jim Collins business book, Good To Great, which doggedly promotes discipline as one of the key determinants of a company’s success.
Like his other ventures, Nordgold is very much a family business. Mordashov owns 35 per cent while son Kirill has a 65 per cent share which was gifted in 2019.
Twenty-one-year-old Kirill is currently the sole holder of this almost two-thirds stake, after younger brother Nikita was sent to do military service.
He was conscripted after performing abysmally on a university course at Moscow’s prestigious Higher School of Economics, where he was reported to be one of the worst students in his year.
Despite the shenanigans, Mordashov always said he would return Nordgold to the London market when the time was right – and other major gold firms Yamana Gold and Endeavour Mining have also made or are making the same leap.
John Meyer, head of research at SP Angel, said: ‘There is definitely a gap for another gold producer to fill the hole left by Randgold Resources merging with Barrick in 2018 and forsaking its London listing.
‘The rising gold price makes it a good time to come into the market. I believe gold is getting ready for another run – there is inflation in the system and Joe Biden’s go-big trillion-dollar stimulus package is on the way.’
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