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| ENRC abolishes final dividend as it reports $550m pre-tax loss | ENRC abolishes final dividend as it reports $550m pre-tax loss |
| (6 months later) | |
| The controversial founding trio behind Eurasian Natural Resources Corporation have had their 2012 income slashed by more than $115m (£76m) after the embattled FTSE 100 group abolished its final dividend. | The controversial founding trio behind Eurasian Natural Resources Corporation have had their 2012 income slashed by more than $115m (£76m) after the embattled FTSE 100 group abolished its final dividend. |
| The Kazakh mining company slumped to a $550m pre-tax loss in 2012 and said on Wednesday there would be no final dividend, meaning payouts to shareholders in 2012 totalled just 6.5 cents a share compared with 27 cents in 2011. | The Kazakh mining company slumped to a $550m pre-tax loss in 2012 and said on Wednesday there would be no final dividend, meaning payouts to shareholders in 2012 totalled just 6.5 cents a share compared with 27 cents in 2011. |
| ENRC's three founding shareholders – Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov – own about 44% of the firm, and the company's cost saving means they collectively received dividends of around $37m during 2012. In 2011, the trio banked about $152m. | ENRC's three founding shareholders – Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov – own about 44% of the firm, and the company's cost saving means they collectively received dividends of around $37m during 2012. In 2011, the trio banked about $152m. |
| Other major shareholders who will take a hit include fellow FTSE 100 mining group Kazakhmys, which owns 26% of ENRC and will have seen its dividends fall by $67m, as well as Kazakhstan's ministry of finance, whose 11.7% stake paid out $31m less in 2012. | Other major shareholders who will take a hit include fellow FTSE 100 mining group Kazakhmys, which owns 26% of ENRC and will have seen its dividends fall by $67m, as well as Kazakhstan's ministry of finance, whose 11.7% stake paid out $31m less in 2012. |
| The firm's chief executive, Felix Vulis, described 2012 as a challenging year in which weak aluminium prices and a hit to the value of the company's operations in Africa forced it to slash $1.5bn from the value the company attributes to its assets. | The firm's chief executive, Felix Vulis, described 2012 as a challenging year in which weak aluminium prices and a hit to the value of the company's operations in Africa forced it to slash $1.5bn from the value the company attributes to its assets. |
| He said: "It is disappointing to have to announce write-downs [in the value] and provisions across a number of the group's assets, which have resulted in a basic loss per share for the year. Approximately 60% of this charge relates to the group's alumina business and our onerous contract with [Russian aluminium group] Rusal, which is primarily a reflection of the current state of the aluminium market." | He said: "It is disappointing to have to announce write-downs [in the value] and provisions across a number of the group's assets, which have resulted in a basic loss per share for the year. Approximately 60% of this charge relates to the group's alumina business and our onerous contract with [Russian aluminium group] Rusal, which is primarily a reflection of the current state of the aluminium market." |
| The huge loss followed 2011 profits of $2.8bn and adds to the woes of a company that has suffered from a share price crash and a series of corporate governance controversies. | The huge loss followed 2011 profits of $2.8bn and adds to the woes of a company that has suffered from a share price crash and a series of corporate governance controversies. |
| The company has attracted the attention of the Financial Services Authority's UK Listing Authority over concerns regarding transactions the company has conducted with shareholders and management. The regulator's review comes on top of the company's continuing efforts to report its findings to the Serious Fraud Office following internal investigations into allegations relating to its Kazakhstan and Africa businesses. | The company has attracted the attention of the Financial Services Authority's UK Listing Authority over concerns regarding transactions the company has conducted with shareholders and management. The regulator's review comes on top of the company's continuing efforts to report its findings to the Serious Fraud Office following internal investigations into allegations relating to its Kazakhstan and Africa businesses. |
| The list of negative publicity has coincided with a terrible run for the company's shares, which more than halved in 2012. They had begun 2013 more promisingly on the back of decent production numbers and rumours that the company might be a takeover target, although they have since retrenched. The shares were trading down around 1.8% at 302p on Wednesday morning. | The list of negative publicity has coincided with a terrible run for the company's shares, which more than halved in 2012. They had begun 2013 more promisingly on the back of decent production numbers and rumours that the company might be a takeover target, although they have since retrenched. The shares were trading down around 1.8% at 302p on Wednesday morning. |
| Vulis also admitted that the company was considering issuing new shares in order to tackle debts and in response to forthcoming rules that increase the minimum number of tradeable shares that FTSE 100 companies need in issue. "We have five major shareholders, their decision will be important for us to proceed," he said. "We as a management are fully committed to remaining in the FTSE 100 – and that process has been started". | Vulis also admitted that the company was considering issuing new shares in order to tackle debts and in response to forthcoming rules that increase the minimum number of tradeable shares that FTSE 100 companies need in issue. "We have five major shareholders, their decision will be important for us to proceed," he said. "We as a management are fully committed to remaining in the FTSE 100 – and that process has been started". |
| The ENRC chairman, Mehmet Dalman, later added that the key motivation was the free float of shares and not the company's balance sheet, thanks to new credit facilities. | The ENRC chairman, Mehmet Dalman, later added that the key motivation was the free float of shares and not the company's balance sheet, thanks to new credit facilities. |
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