Cleary Gottlieb Advises the Assaubayev Family

December 7, 2010

In June 2010, proceedings were initiated against the Assaubayev family in the High Court and elsewhere by Polyus Gold. The dispute was in connection with Polyus Gold’s acquisition of a controlling stake in KazakhGold, which was previously owned by the Assaubayev family. Following a stand-still of the litigation agreed to by the parties in September 2010, a binding framework agreement has now been entered into by AltynGroup Kazakhstan LLP, an entity controlled by the Assaubayev family, and KazakhGold to settle all disputes and implement a significant corporate transaction.

The corporate transaction will see AltynGroup acquire KazakhGold’s interests in its operating subsidiaries in Kazakhstan, Romania and Kyrgyzstan for a total cash consideration of approximately $509 million. In addition, AltynGroup will arrange for the re-financing of KazakhGold’s debt by providing a guarantee of KazakhGold’s US$200 million of Senior Notes, and the repayment of an existing $53 million loan to KazakhGold from Polyus Gold.

The transaction is subject to a number of conditions, including approvals from the Government of the Republic of Kazakhstan, receipt of financing by AltynGroup and the entry into of definitive agreements. The sale of shares in the operating subsidiaries is expected to be completed in two tranches, with approximately 65% of the shares being sold following the entry into of definitive agreements and satisfaction of conditions, and the remaining interests being sold within 18 months from the date of the framework agreement.