OREANDA-NEWS. July 09, 2010. KazakhGold Group Limited (the “Issuer”) announced that it has commenced a consent solicitation in respect of its USD 200,000,000 9.375 per cent. Senior Notes due 2013 (the “Notes”). The final voting deadline for submission of electronic voting instructions in relation to the consent is 3:00 p.m. (London time) on 23 July 2010.

On 30 June 2010 the Board of the Issuer and Polyus Gold announced the Proposed Combination of the Issuer and OJSC Polyus Gold (the “Proposed Combination”), which, if completed, would result in the Issuer acquiring all or substantially all of the issued share capital of Polyus Gold.  Following completion of the Proposed Combination, Polyus Gold will become a subsidiary of KazakhGold, and KazakhGold, subject to shareholder approval, will be renamed ‘‘Polyus Gold International Limited’’, a leading international gold company with a single London listing. 

The purpose of the consent solicitation is to obtain the consent of Noteholders (which consent shall remain valid until 31 December 2010) (1) to waive certain existing breaches by the Issuer under the terms and conditions of the Notes; (2) to waive pre-emptively certain breaches of the terms and conditions of the Notes that are expected to arise in connection with the Proposed Combination, and (3) to waive pre-emptively any default or event of default that may arise as a result of any restructuring, redomiciliation or liquidation of the Issuer’s subsidiary Romanshorn LC AG. 

The proposed waivers are described in more detail in the Consent Solicitation Statement dated 2 July 2010.  The Consent Solicitation Statement will only be made available in electronic form, and will only be provided to and may only be acted upon by Noteholders which have confirmed that they are not a U.S. Person (within the meaning of Regulation S under the US Securities Act of 1933 as amended) or acting on behalf of a U.S. Person or physically located in the United States, its territories and possessions. 

The Issuer will consider exercising its right arising on or after 6 November 2010 under Condition 5(b) of the Notes to redeem the Notes at a redemption price equal to 104.688 per cent. of the principal amount of the Notes plus accrued and unpaid interest to the redemption date, subject to market conditions.

Completion of the Proposed Combination is not in any way contingent upon the approval by Noteholders of the Extraordinary Resolution.

If all of the conditions to the Consent Solicitation Statement have been satisfied or waived including that the Extraordinary Resolution is passed, the Issuer will pay a consent fee of USD 5 for each USD 1,000 in principal amount of the Notes held by Noteholders who vote in favour of the Extraordinary Resolution. To be passed, the Extraordinary Resolution requires a majority voting in favour consisting at least three?quarters of the votes cast at a duly convened and quorate Meeting. If passed, the Extraordinary Resolution will be binding upon all the Noteholders. The Meeting will be held at 3:00 p.m. (London time) on 27 July 2010 at the offices of Debevoise & Plimpton LLP at Tower 42, Old Broad Street, London EC2 1HQ, United Kingdom. Voting can take place by Electronic Voting Instruction via the Clearing Systems or by attending the Meeting and producing a Note or a valid Form of Proxy.

The Issuer has retained Morgan Stanley & Co. International plc (“MSI”) to act as sole Solicitation Agent and D. F. King (Europe) Limited to act as Tabulation Agent (“DFK”).  Copies of the Consent Solicitation Statement can be obtained by eligible Noteholders from D. F. King (Europe) Limited. 

Requests for information in relation to the consent solicitation should be directed to Liability Management Europe at MSI by e-mail to: liabilitymanagementeurope@morganstanley.com.  Requests for information in relation to the procedures for voting in the Meeting should be directed to Caroline Hall from DFK at +44 20 7920 9718 or by e-mail to: chall@dfking.com.