Russia has failed for a second time to auction the stake in gold producer Uzhuralzoloto (UGC) that it seized last year, the federal property management agency said on Tuesday, dealing a blow to the government as it seeks to ease budget pressures.
A Russian court ruled last July that a majority stake in UGC, previously owned by businessman Konstantin Strukov, should be seized and transferred to the state, part of a broader pattern of nationalisation of Russian corporate assets.
The latest auction follows an attempted sale earlier in May, when no bids were received for Strukov’s assets. The lot, with a starting price of 162.02 billion roubles ($2.2 billion), included a 67.2% stake in UGC.
RUSSIA FACING BUDGET PRESSURES
This time, the auction was declared invalid because only one bidder submitted a complete application and paid the deposit. A second contender, engineering company Russkie Ugli, failed to pay the deposit and provide the required documents, the agency, Rosimushchestvo, said in a statement.
The agency did not share further details on the bidders, but auction documents seen by Reuters show that the sole bidder was gold miner Pokrovskiy Rudnik. Gold producer Atlas Mining, which owns Pokrovskiy Rudnik, declined to comment.
Rosimushchestvo has not said whether it will hold another auction.
As budget strains deepen, the failed sale is a setback for the finance ministry, which had planned to sell the stake by the end of 2025. It did not reply to a request for comment.
The lack of qualified bidders was despite the sale being structured as a Dutch auction, in which the price is gradually lowered until a bid is placed. This could have seen the stake sell for as little as 50% of the initial asking price.
Another court-confiscated asset, Moscow’s Domodedovo Airport, was sold via Dutch auction for the minimum price of $869 million in January, with only one bidder participating.
Source: Reuters.com