International law firm Freshfields Bruckhaus Deringer has advised Severstal on the spin-off to its shareholders of its Dutch incorporated emerging market gold producer, Nordgold, and Nordgold on its Global Depositary Receipt (GDR) listing on the London Stock Exchange. For Russian legal reasons, the spin-off was accomplished by means of an offer of Nordgold GDRs to Severstal’s minority shareholders by Nordgold’s parent, one of Severstal’s subsidiaries, in exchange for Severstal shares and GDRs held by the Severstal minority shareholders, and an offer to an entity owned by Severstal’s controlling shareholder to acquire the balance of Nordgold for the same consideration. The Nordgold GDRs are expected to be issued and listed this week.
Sarah Murphy, a partner in Freshfields’ international capital markets team, commented: ‘This structure was unique as it was designed to replicate a spin-off to the extent practicable using the exchange offer structure. “Split-off” structures have been used in the US in the past but not with an unlisted subsidiary.’
Moscow corporate partner Dmitry Surikov commented, ‘We have been pleased to help Severstal in this transaction which will allow it to focus on its core strengths as a leading vertically integrated steel and steel-related mining company’.
The Freshfields team advising on the deal was led by partner Sarah Murphy (London) with partners Dmitry Surikov and Neil Radford (Moscow) and Robert ten Have and Dirk-Jan Smit (Amsterdam). They were assisted by associates Nikolay Seliakov and Dmitry Tolokonnikov (Moscow), Bob Lehner and Barbara Hungerford (London) and senior associate Andrew Boyer (London) as well as associates Henriette van Overklift, Igor Dovgaliouk and Mechteld Flohil (Amsterdam).
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