PLZL.L Regulatory News (PLZL)

30 Apr 2009 16:43

FOR IMMEDIATE RELEASE

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER RESTRICTED JURISDICTION

30 April 2009

KAZAKHGOLD GROUP LIMITED

REPLACMENT: REVISION OF PROPOSED PARTIAL OFFER UPDATE:

On 29 December 2008, OJSC Polyus Gold ("Polyus Gold") and KazakhGold Group Limited ("KazakhGold" or the "Company") announced revised terms of the proposed partial offer to be made by Jenington International Inc. ("Jenington"), an indirect wholly-owned subsidiary of Polyus Gold, to acquire 50.1 per cent. of the issued and to be issued share capital of KazakhGold (the "Proposed Partial Offer").

Further to the announcement of 29 December 2008, the Company's production levels and working capital levels have deteriorated substantially more rapidly than previously anticipated and KazakhGold requires a funding commitment, in order to continue to operate as a going concern in its current form. 

Due to these wholly exceptional circumstances, the terms of the Proposed Partial Offer as announced on 29 December 2008 are no longer valid, however, KazakhGold and Polyus Gold remain in active negotiations to agree revised terms in respect of the Proposed Partial Offer.

Polyus Gold remains committed to making the Proposed Partial Offer for KazakhGold on revised terms currently being negotiated with the Company and, subject to certain pre-conditions being fulfilled, expects to be in a position to make an announcement in accordance with Rule 2.5 of the Takeover Code (the "2.5 Announcement") by end of May.

The making of the 2.5 Announcement is subject to certain pre-conditions, including:

(i) the approval of the final structure of the Proposed Partial Offer as required by Rule 36 of the Takeover Code by the Takeover Panel;

(ii) the execution of hard irrevocable undertakings to accept and vote in favour of the Proposed Partial Offer in respect of the entire holdings of 22,100,000 shares by Gold Lion and 41,036 KazakhGold GDRs by the directors of KazakhGold, on terms to be agreed between Gold Lion, the directors, Jenington and Polyus Gold;

(iii) the final approval of the Board of Polyus Gold of the Proposed Partial Offer; and

(iv) the unanimous recommendation by the Board of KazakhGold of the terms and conditions of the Proposed Partial Offer in the 2.5 Announcement.

Polyus Gold and Jenington reserve the right to waive, in whole or in part, any of the pre-conditions other than (i) above at its sole discretion.

The Board of KazakhGold believes that a revised Proposed Partial Offer, if made, would allow KazakhGold to continue as an independently listed entity and would also provide the necessary funding so that KazakhGold can execute its investment plan and unlock the inherent value of KazakhGold's assets. The Board further believes that Polyus Gold's partial ownership of KazakhGold Group would provide KazakhGold with the stability of a sizeable parent with proven management experience and expertise and superior access to capital. Accordingly, the Board believes that after completion of a revised Proposed Partial Offer, KazakhGold Shareholders would retain a direct economic interest in a business whose prospects would be significantly enhanced.

This announcement does not constitute an announcement of a firm intention to make an offer under Rule 2.5 of the Takeover Code. Accordingly, there can be no certainty that an offer will ultimately be made, even if the pre-conditions are satisfied or, if capable of waiver, waived.

This announcement is being made with the agreement of the Panel Executive.

A further announcement regarding the Proposed Partial Offer will be made in due course.

Enquiries:

Canaccord Adams Limited (financial adviser to KazakhGold)

HSBC Bank plc (financial adviser to Polyus Gold)

Canaccord Adams Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for KazakhGold and no one else in connection with the Proposed Partial Offer and will not be responsible to anyone other than KazakhGold for providing the protections afforded to clients of Canaccord Adams Limited, nor for providing advice in relation to the Proposed Partial Offer, the contents of this announcement or any other matter referred to herein.

HSBC Bank plc, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Polyus Gold and Jenington and no one else in connection with the Proposed Partial Offer and will not be responsible to anyone other than Polyus Gold and Jenington for providing the protections afforded to clients of HSBC Bank plc, nor for providing advice in relation to the Proposed Partial Offer, the contents of this announcement or any other matter referred to herein.

General

The release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of England.

This announcement is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities or a solicitation of any vote or approval in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document. KazakhGold Shareholders are advised to read carefully the formal documentation in relation to the Proposed Partial Offer, if made, once it has been despatched. The Proposed Partial Offer, if made, will be made solely through the Partial Offer Document, which will contain the full terms and conditions of the Proposed Partial Offer. Any acceptance or other response to the proposals should be made only on the basis of the information in the Partial Offer Document.

The Polyus Gold Shares have been registered in the Russian Federation and have not been, and will not be, registered under the United States Securities Act of 1933 (as amended) or under any relevant securities laws of any state or district of the United States, or under the relevant securities laws of Canada, Australia, Japan or any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Polyus Gold does not plan to make a public offering of securities in the United States.

The Proposed Partial Offer, if made, will not be made, directly or indirectly, in or into, or by the use of the mails or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facility of a national securities exchange of, Canada, Australia, Japan or, subject to certain exceptions, the United States, or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction. Accordingly, copies of this announcement will not be, nor may they be, mailed or otherwise forwarded, distributed or sent in, into or from (whether by use of the mails or any means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or any facilities of a national securities exchange) Canada, Australia, Japan or, subject to certain exceptions, the United States, or any other jurisdiction if to do so would constitute a violation of the relevant laws of such jurisdiction.

Neither this announcement nor any information contained herein is an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities in Russia, and does not constitute an advertisement of the securities in Russia. KazakhGold shares and KazakhGold GDRs have not been and will not be registered in Russia and are not intended for "placement" or "public circulation" in Russia. Polyus Gold Shares to which this communication relates have not been and will not be registered outside Russia and are not intended for "placement" or "public circulation" outside Russia as each term defined under Russian securities laws.

The availability of the Polyus Gold Shares under the terms of the Proposed Partial Offer, if made, to persons who are not located in Jersey, the United Kingdom or the Russian Federation may be affected by the laws of the relevant jurisdiction in which the relevant persons are located. Persons who are not resident in Jersey, the United Kingdom or the Russian Federation should inform themselves of, and observe, any applicable legal or regulatory requirements of the relevant jurisdiction. If the Proposed Partial Offer is made, further details in relation to overseas persons who are KazakhGold Shareholders will be contained in the Partial Offer Document.

No profit forecast

Nothing in this announcement is intended to be, or is to be construed as, a profit forecast or to be interpreted to mean that earnings per KazakhGold Share, KazakhGold GDR, Polyus Gold Share or Polyus Gold ADR for the current or future financial years, or those of either Polyus Gold or KazakhGold, will necessarily match or exceed the historical published earnings per KazakhGold Share, KazakhGold GDR, Polyus Gold Share or Polyus Gold ADR.

Forward looking statements

This announcement, including information included or incorporated by reference, may contain "forward-looking statements" concerning the Proposed Partial Offer, Polyus Gold, Jenington and KazakhGold. Generally, the words "will", "may", "should", "could", "would", "can", "continue", "opportunity", "believes", "expects", "intends", "anticipates", "estimates" or similar expressions identify forward-looking statements. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Polyus Gold, Jenington and KazakhGold operations and potential synergies resulting from the Proposed Partial Offer; and (iii) the effects of government regulation on Polyus Gold, Jenington and KazakhGold's businesses. Many of these risks and uncertainties relate to factors that are beyond the companies' abilities to control or estimate precisely, such as future market conditions and the behaviours of other market participants, and therefore undue reliance should not be placed on such statements which speak only as at the date of this announcement. Each of Polyus Gold, Jenington and KazakhGold assumes no obligation in respect of, and does not intend to update, these forward-looking statements, except as required pursuant to applicable law.

Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of 'relevant securities' of KazakhGold or Polyus Gold, all 'dealings' in any 'relevant securities' of KazakhGold or Polyus Gold by such person (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed to a Regulatory Information Service and the Panel by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which any offer for KazakhGold becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of KazakhGold, they will be deemed to be a single person for the purpose of Rule 8.3.

Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of KazakhGold or Polyus Gold by Polyus Gold, Jenington or KazakhGold or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.

A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.

'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.

Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website.

If you are in any doubt as to whether or not you are required to disclose a 'dealing' under Rule 8, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or contact the Panel by telephone (+44 (0) 20 7638 0129) or by fax (+44 (0) 20 7236 7013).