Kazakhmys Stock Price Falls after its Chairman's Sells Shares for £840m

    Mining group, Kazakhmys, has fallen 27p to £13.96 after chairman Vladimir Kim sold nearly a third of his stake at £14.23 a share, raising around £840m. He has promised not to sell any more shares for at least 12 months with the exception of 21.5m or 4% of the company, which he might dispose of to provide "liquidity for a possible secondary listing on the Hong Kong Exchange in 2011." The shares were purchased by Kazakhstan’s National Welfare Fund Samruk-Kazyna JSC (“Samruk-Kazyna”). Mr Kim’s interest in the Company is now 149,306,795 ordinary shares (representing 27.9% of the shares in issue). The interest of the Government of Kazakhstan has increased to 139,162,843 ordinary shares (representing 26.0% of the shares in issue), including The State Property & Privatization Committee’s existing 15.0% interest.
    And why has Mr Kim sold this chunk of 58.8m shares to the national welfare fund of the government of Kazakhstan? Reportedly, it allows him to "diversify his investment portfolio whilst retaining a significant long-term shareholding in Kazakhmys." It is his first sale since the float in 2005, and he "remains firmly committed to his role in leading Kazakhmys in delivering its strategic objectives." As for the government, the move "demonstrates a positive commitment... to a strategically important company within Kazakhstan." Kazakhmys is a business that operates under a close relationship with the state as evidenced by its investment in the power grid (a 50/50 JV with Samruk), its significant social spending initiatives including the construction of a library at a cost of $100m, and continuing capital expense towards various other recreational and health facilities according to The Guardian.