Russia fails again to sell stake in gold miner UGC

Russia has failed for a second time to auction a stake in gold producer Uzhuralzoloto (UGC) that it seized last year, the federal property management agency said. This is 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, reflecting 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 ($2.22 billion), included a 67.2% stake in UGC.

This time, the auction was declared invalid because only one bidder submitted a complete application and paid the deposit. A second contender failed to pay the deposit and provide the required documents, the agency, Rosimushchestvo, said. 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. Shares were down 7.67% on the Moscow Exchange in afternoon trading.