Kazakh with caution

14 November 2007 By Una Galani Follow @ugalani

Emerging markets are commodities are in vogue. So the London listing of the mooted$15bn natural resources group is sure to set pulses racing. Yet investors should be prudent. The valuation looks bullish and the Kazakh government s 25% stake probably warrants a discount.

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Kazakhstanbased Eurasian Natural Resources Corporation on Tuesday announced an intention to float 20% of its shares on the London Stock Exchange by midDecember.
ENRC is the world's largest producer of ferralloys, used to make stainless steel, and has iron ore, alumina and energy operations. The group accounts supplies 16% of Kazakhstan's electricity and accounts for 4% of national GDP.

Kazakhmys, a Londonlisted natural resource group, exercised options in September to purchase a 19% stake in ENRC for $807m from Valdimir Kim, chief executive of Kazakhmys. Kim purchased the stake in May 2006 prior to the restructuring of the group's divisions into ENRC.

ENRC's metal magnate founders Patokh Chodiev, Alijan Ibragimov, and Alexander Mashkevitch own 56% of the group, and the Kazakhstan government owns a 25% stake.

ENRC has revenues of $3.26bn in 2006, and ebitda of $1.26bn

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