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The son of one of many Kazakh oligarchs who based what’s now Eurasian Sources Group is looking for to purchase out his late father’s companions in a deal that may give Shukhrat Ibragimov a majority stake within the worldwide mining home.
The tussle for management is the most recent twist within the historical past of the previous FTSE 100 firm, then referred to as ENRC, which as soon as had a market valuation of £13bn.
The sprawling Kazakh conglomerate grew to become a logo of the move of Soviet cash into London within the 2000s when it first floated its shares and gained additional notoriety when it delisted six years later amid a corruption probe by the UK Severe Fraud Workplace.
Ibragimov, 39, who has served as ERG chief govt since October, has proposed to amass 40 per cent of the corporate presently held by Patokh Chodiev and the heirs of the lately deceased Alexander Machkevitch, in keeping with 5 folks acquainted with the talks.
Chodiev, Machkevitch and Ibragimov’s father Alijan Ibragimov — identified within the trade as “the Trio” — based the enterprise within the Nineties with previously state-owned mining belongings that had been privatised by the Kazakh authorities following the collapse of the Soviet Union.
The three males, as soon as described by considered one of their non-executive administrators as “extra Soviet than Metropolis”, listed the corporate in London in 2007 and expanded operations to incorporate initiatives in Zambia and the Democratic Republic of Congo.
The following SFO investigation centred on the suspected fee of bribes in DR Congo however was finally dropped in 2023 after a bungled 10-year probe, throughout which ENRC sued the SFO over alleged misconduct.
Ibragimov has labored for ERG since 2015 and served on the board since 2021, following his father’s dying. The transition to the subsequent technology continued final 12 months, when Chodiev handed his board seat to his son Sabir Chodiev and Machkevitch was changed by his nephew Eduard Surlevich.
The talks to allow Ibragimov to amass the opposite households’ stakes additionally started final 12 months however have gathered tempo for the reason that dying in March of 71-year-old Machkevitch after an extended sickness, two of the folks stated.
Every of the three households owns about 20 per cent of Luxembourg-registered ERG, with the remaining 40 per cent held by the Kazakh authorities.
Chodiev and the heirs of Machevitch are regarded as open to promoting however valuing the corporate has confirmed difficult and talks have periodically turn into hostile, the 2 folks stated.
Whereas the Chodiev and Machkevitch households have sought as a lot as $1.8bn for his or her mixed 40 per cent stake, Ibragimov has argued for a decrease valuation, they added.
The three households additionally share possession of a holding firm that owns a financial institution and an insurer in Kazakhstan. One choice below dialogue may contain Ibragimov buying and selling his household’s stake in these corporations for a part of the worth and paying the remaining in money, in keeping with one of many folks.
The negotiations are going down at a second of elevated political and investor curiosity within the mining sector because the west competes with China to get higher entry to the metals wanted to construct out AI and clear power infrastructure.
Shukhrat Ibragimov, Sabir Chodiev and Eduard Surlevich didn’t reply to direct requests for remark.
ERG advised the Monetary Instances it didn’t touch upon conversations between its shareholders. “If any, such dialogue could be by default personal. We’re targeted on doing our mining and metals work, and there aren’t any modifications to enterprise as typical,” it stated in an announcement.
The elder Chodiev studied on the Moscow State Institute of Worldwide Relations, the elite Soviet spy college, and labored as a diplomat earlier than becoming a member of forces with Machkevitch and Alijan Ibragimov. Alijan was the mining specialist among the many trio and early on recognized his son as a future chief govt of the corporate.
One particular person with information of the state of affairs stated the Kazakh authorities was eager for ERG to have a majority shareholder with a long-term imaginative and prescient, suggesting it would help Ibragimov’s try to achieve better management. The Kazakh authorities didn’t reply to a request for remark.
ERG is amongst Kazakhstan’s largest employers and has stated its operations signify greater than one-third of the nation’s metals and mining trade. The corporate additionally owns a group of mines in DR Congo which might be a key supply of copper and cobalt, and which have beforehand attracted curiosity from potential consumers.
Extra reporting by Polina Ivanova in Berlin
