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European law firm Fieldfisher has advised London AIM-listed Amur Minerals Corporation on the sale of its wholly owned subsidiary, AO Kun-Manie, to Bering Metals LLC, a Russian-incorporated company controlled by Russian entrepreneur, Vladislav Sviblov.
AO Kun-Manie is an exploration and mining company which holds the mineral licence for the Kun-Manie nickel-copper sulphide project located in the Amur Oblast in the far east of the Russian Federation.
Negotiations for the sale commenced prior to Russia's 'special military operation' in Ukraine, following Amur's recognition that only a local partner would have the means to bring the project to production.
However, the transaction and its completion were significantly complicated by the conflict and the resulting Western sanctions as well as Russian counter-sanctions against Western companies holding Russian assets.
An agreement was ultimately reached with Mr Sviblov to sell Kun-Manie for US$105 million, payable on heavily deferred terms. However, the deferred consideration arrangement was rejected by Amur's shareholders and so a share purchase agreement has been executed with a revised immediate payment of US$35 million.
Restrictions on transferring funds delayed the completion, while appropriate due diligence and clearance checks were undertaken.
The transaction will enable Amur to dispose of its Russian project in a managed process in a difficult geopolitical situation.
Following receipt of the consideration for Kun-Manie, Amur intends to pay a dividend to its shareholders within 90 days of completion.
Amur will remain listed on London's AIM market and will seek to acquire another company or business in the mining and metals sector.
A cross-practice team of Fieldfisher mining, corporate, sanctions, disputes and Russia and CIS specialists advised Amur on the sale of Kun-Manie throughout the two-year transaction process, which has required detailed understanding of the sanctions landscape and Russian M&A law, as well as comprehensive equity capital markets expertise.
The team advising Amur was led by corporate partner, George Cotter.
Commenting on the sale, George Cotter said:
"We are pleased to have finally brought this long and challenging transaction process to a successful conclusion for Amur.
"Many of the difficulties the company has faced over the past two years have been due to circumstances beyond Amur's control and we have worked tirelessly with the company’s management, for whom we have acted since Amur's IPO in 2006, to navigate the various barriers to completing this sale."
George Cotter was assisted on the transaction by corporate partner Natalia Schuster.