Dutch auction for sale of Russia's UGC fails to take place after only one participant submits application, pays deposit, required minimum is two

MOSCOW. May 26 (Interfax) - The Dutch auction for the sale of 67.2% of shares in the gold mining company PJSC Uzhuralzoloto Group of Companies (UGC) and other assets belonging to UGC Group has been declared invalid due to a lack of qualified bidders who paid the deposit, the Federal Property Agency (Rosimushchestvo) said.

The basis for the decision to declare the auction invalid was the fact that only one participant submitted an application to participate in the auction and paid the deposit, whereas the auction documentation requires at least two applications with paid deposits, Rosimushchestvo's press service said. The name of this bidder has not been disclosed.

At the same time, the second potential bidder, whose application was rejected, did not pay the deposit and also submitted an incomplete set of documents, Rosimushchestvo said. According to the protocol posted on the Torgi state information system, JSC Russkie Ugli or Russian Coals was not allowed to participate in the auction.

The total market value of all UGC assets has been estimated at 162.02 billion rubles, including a 67.2% stake in PJSC Uzhuralzoloto Group of Companies, valued at 140.437 billion rubles. The first auction for the sale of UGC did not take place due to a lack of bids. The repeat auction in the Dutch auction format was scheduled for May 26. It allowed for a price reduction of up to 50% of the floor price - down to 81.01 billion rubles.

Bidders had to apply to participate on the Roseltorg platform and pay a deposit of 20% of the floor price or 32.404 billion rubles. The Dutch auction would be deemed to be valid if there are two or more buyers who have submitted an application and paid a deposit, as well the necessary paperwork.

In July last year, a court in Chelyabinsk satisfied the Prosecutor General's Office's claim to confiscate the stake held by Konstantin Strukov in UGC and UGC Management Company, as well as stakes in a number of companies held by several individuals associated with him, in favor of the state due to the corrupt nature of the business.