The proposal by Chaarat Gold to acquire Kumtor does not provide sufficient benefits to Centerra. CIBC analytics said.
As the organization notes, analysis suggests that the proposal does not provide sufficient benefits to Centerra, given its future funding obligations, despite improving the geopolitical risk profile.
According to the analytics, the sale of Kumtor will significantly reduce Centerra’s free cash flow, which is required to support the new development projects.
The current balance sheet will be insufficient to fund the heavy project capital requirements through to 2024, if the Chaarat deal is accepted.
Recall, Centerra has rejected the offer, and the Kyrgyz Republic officials confirmed that the Cabinet of Ministers was not interested in pursuing the transaction proposed by Chaarat.