The Russian state has sold a controlling stake in Yuzhuralzoloto Group (YUGK), one of the country’s largest gold producers, for 93.16 billion rubles ($1.27 billion) after a fourth auction attempt. The winning bidder, infrastructure holding BTS-Most, secured the 67.2% stake at a 42% discount to the starting price of 162 billion rubles, following a Dutch auction format that allowed the price to drop to as low as 81 billion before competitive bidding resumed. YUGK shares, which initially rose 5.9% on the morning of the auction, reversed course and fell more than 6% on news of the completed sale before paring losses to around 2.8%, reflecting investor uncertainty over the discounted transfer.

The auction mechanism itself underscored the state’s difficulty in attracting buyers for confiscated assets. The Dutch format, with a 2% step-down and a floor of 50% of the initial valuation, was deployed after three previous attempts—including one standard auction and one earlier Dutch auction—failed due to a lack of qualified bidders. Rosimushchestvo, the federal property agency, required a 20% deposit and at least two participants for the auction to proceed. Only one other applicant, Innovation LLC, was rejected for not posting the required 32.4 billion ruble deposit. The lot included not only the YUGK shares but also a coal company stake and agricultural enterprises, all seized from former owner Konstantin Strukov.

The sale concludes a process that began in July 2025 when a Chelyabinsk court granted a prosecutor’s request to nationalise Strukov’s holdings, alleging he used his position as a regional lawmaker to illegally acquire the assets. Strukov, a member of the ruling United Russia party and a recipient of a state order of merit from President Vladimir Putin, had controlled YUGK since 1997. The buyer, BTS-Most Holding, is 94.4% owned by Ruslan Baisarov, a Chechen-born entrepreneur with interests in coal mining and transport infrastructure. London has sanctioned Baisarov for benefiting from or supporting the Russian government, a factor that may complicate the asset’s international profile. Minority shareholders, holding about 11% of YUGK, were not covered by a mandatory buyout offer from the state, after a presidential decree exempted the government; the obligation may now fall to the new owner.

Proceeds from the sale are to be directed to federal budget priorities, according to Finance Ministry statements. The transaction marks one of the largest disposals of seized private assets since Russia’s full-scale invasion of Ukraine, a campaign that has brought hundreds of companies under state control. Viewed from Moscow, the deep discount signals limited appetite for such assets amid sanctions and legal uncertainties. The next milestone is the formal conclusion of the purchase agreement and the transfer of funds, after which attention will turn to whether Baisarov’s ownership triggers any regulatory or sanctions-related complications for YUGK’s operations and its remaining publicly traded shares.