Chelsea football club owner sells gold mining stake for $1.4 billion

Roman Abramovich, the billionaire owner of Chelsea Football club and other investors have agreed to sell 40% of a stake in Russian gold mining firm, Highland Gold Mining for $1.4 billion to Fortiana Holdings Ltd.

It was also reported that Fortiana would offer the other existing shareholders of the firm the same offer of $3.94 per share at a 3.8% premium of the shareprice.

Backstory: This comes at a period of rallying gold prices as Nairametrics reported earlier that gold prices surged over $1,800 per ounce for the first time since 2011, as the year to date inflows into bullion-backed exchange-traded funds (ETF) have topped the record full-year total, which was set in 2009.

Gold prices also set a record of $2000 per ounce before dropping to just above $1900 earlier this week

The gold rally has made gold mining firms attractive for further M&A activity, as Fortiana Holdings, owned by Russian businessman, Vladislav Sviblov looks to enter fully into space with other firms eyeing up smaller gold mergers around the world.

Highland Mining directors have been urged by Citigroup to accept the offer as Fortiana says the deal would be financed through a loan from VTB Bank. Highland Mining firm as also risen with the gold rally as the stock price is up 47% year to date.

What this means: With the gold rally and economic uncertainty due to the global depressions caused by the pandemic, more gold mining firms are expected to be scooped up in M&A deals. For Chelsea fans, this could see the club having more funds for player transfers especially for a goalkeeper, as UEFA relaxed FFP regulations for clubs to afford players during the pandemic. Chelsea bought winger  Ziyech from Ajax for a €40 million fee and also bought German Striker, Timow Werner for a €53 million fee from RB Leipzig.

By William Ukpe

Gh Extractives is an independent multimedia portal that seeks to provide credible information and news content to readers especially players in the extractive sector in Ghana, Africa and beyond. It also provides a unique platform for players in the energy sector to market their products and reach a wider audience

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