ALEXEI MORDASHOV TRIES TO SELL HIS NORDGOLD SHARES OUTSIDE RUSSIA AGAIN, BUT HIS FAILURE ISN’T THE LESSON THE RUSSIA WARFIGHTERS WANT YOU TO BELIEVE
By John Helmer, Moscow
Last month the Russian metals and mining oligarch, Alexei Mordashov (lead image, left), took a spectacular pratfall in front of the international money markets. Not even hand-holding by Citigroup, JP Morgan, Credit Suisse, and Bank of Montreal could save him from the public embarrassment.
On June 3, Mordashov and the banks announced his intention to sell shares in his goldmining company Nordgold (Nord Gold PLC) on the London Stock Exchange, telling investors that future demand and the price of gold, and hence the profitability of Mordashov’s company, are bound to be boosted because of “possible inflationary pressures in the medium term from an exceptionally low interest rate environment and the possibility of currency revaluations, including U.S. dollar depreciation”.
On June 22, Mordashov got a Nordgold executive to announce the share sale was cancelled for the foreseeable future. His reason was that “acceleration in expected interest rate rises have created significant uncertainty and volatility in the resources sector, in particular impacting gold and gold equities. Nordgold has determined that it would therefore not be sensible to pursue an IPO at this particular juncture.”
If inflation was good reason for buying shares in Mordashov’s business at the start of the month, and then in less than three weeks Mordashov’s reason for not selling the shares, then Mordashov has made a fool of the market and a liar of himself. “That has to be bullshit,” responded a leading London mining analyst, who believes Mordashov’s vanity is to blame for imagining his shares would fetch a higher value in the market than share-buyers are willing to pay; and also Citigroup, JP Morgan, Credit Suisse, Bank of Montreal and the other bankers and brokers involved who were “too afraid to give him good advice on pricing.”
There is one thing more laughable in this episode than that. This is the effort which the Russia-warfighting media in London – for the first time combining Rupert Murdoch’s Times newspapers with Ian Hislop’s Private Eye — to make the failure of the share sale attempt appear to be an act of “British policy towards Putin and Russia’s rich”, in the words of Private Eye — as symbolic as the voyage of HMS Defender across the Crimean red line on June 23, the day after Mordashov and his bankers took their tumble.(more…)