Petropavlovsk Plc

Petropavlovsk is one of the largest gold mining companies in Russia, both in production and in gold reserves and mineral resources.

Petropavlovsk Plc is registered in the UK, the main office is located in London, the group has offices in Moscow and Blagoveshchensk, and the main assets are located in Russia - in the Amur Region.

Aktivs

• GC "Petropavlovsk"

History

2022

Ex-head of gold mining company Petropavlovsk received 5.5 years in prison for fraud

On December 5, 2022, the Basmanny Court of Moscow sentenced Pavel Maslovsky, founder and former general director of the large gold mining company Petropavlovsk, to five and a half years in prison in a large-scale fraud case (part 4 of article 159 of the Criminal Code). Read more here.

Stopping trading in the company's securities on the London Stock Exchange, the beginning of bankruptcy proceedings

In July 2022, it was announced that Petropavlovsk was launching an insolvency procedure, trading in securities on the London Stock Exchange was suspended. The company filed a statement about the withdrawal from trading of shares on the LSE and convertible Eurobonds-2024, in addition, it is proposed to remove shares on the Moscow Exchange and Eurobonds-2022 from trading over time.

Lenders demand a loan of $200 million

On April 19, 2022, Petropavlovsk Plc reported that its main Russian lender demanded that it immediately repay a loan of $200 million, increasing pressure on the gold miner, which was in a difficult situation due to sanctions against Moscow.

Gazprombank demanded an immediate repayment of the loan in the amount of $201 million and asked to pay another $87.1 million on the credit line next week.

A little later it was announced that Gazprombank had transferred to UMMC the rights to claim a $200 million term loan from Petropavlovsk, the gold mining company said. It was on the verge of default due to non-payment of loans.

The sanctions prevent the gold miner from selling its gold. London The company is headquartered and listed in, but all of its gold mines are located in the Far East. Russia

The company said it was considering selling all of its assets.

British sanctions prohibit the sale of gold to Gazprombank to service a loan

One of the largest Russian gold mining companies, Petropavlovsk, said that due to British sanctions against Gazprombank, it would not be able to sell gold to it and service the loan received from it. Under the terms of the loan, Gazprombank buys all the gold mined by Petropavlovsk.

Region bought 29.18% of the gold mining company Petropavlovsk from Yuzhuralzolot

On March 9, 2022, it became known about the sale of 29.18% of Petropavlovsk to the Region group of companies Sergei Sudarikov. This block of shares in one of the largest Russian gold mining companies was sold by Yuzhuralzoloto Group of Companies (UGK), the press service of the latter said.

TASS, referring to the statement of the UGK, reports that the deal to sell the share of Petropavlovsk will be closed after receiving the necessary regulatory and corporate approvals. At the same time, the timing of the closure of the transaction and its financial terms were not disclosed.

"Region" bought 29.18% of the gold mining company Petropavlovsk

Cash from the sale of a block of shares will be used to reduce the debt burden of Yuzhuralzolot, as well as to finance its own organic development projects in the Chelyabinsk and Krasnoyarsk gold hubs, which have significant growth potential in gold production.

Becoming shareholders of the company, we believed in the growth potential of Petropavlovsk. Unfortunately, the realities of corporate governance, which largely caused the fall in production results, led us to the decision to sell our stake, "said Konstantin Strukov, President of SGC.

Petropavlovsk shares on the London Stock Exchange after the statement of the transaction with the Region Group of Companies rose by 25%, to £3.75 per share (as of 13:55 Moscow time on March 9, 2022), follows from the data of the trading platform. The market capitalization of the gold mining company reached £148.5 million.

As Kommersant notes, by March 9, 2022, it is not clear whether Region intends to remain a shareholder of Petropavlovsk for a long time. Sources of the publication in the industry allowed a scenario for resolving the corporate conflict through the redemption of the share of Mr. Sergei Strukov by a third party, followed by the sale of Petropavlovsk assets. However, against the background of the difficult geopolitical situation caused by the start of Russia's special operation in Ukraine on February 24, 2022, gold prices are rising, while Petropavlovsk shares have fallen sharply in price over the past two years, so it cannot be ruled out that Region considers this transaction as a long-term investment, the publication says.^[1]

2021: Bonum Capital sells 2.9% of the company to the family of Konstantin Strukov

The Bonum Capital Fund Murat Aliyev sold 2.9% of the gold mining company Petropavlovsk to the structures of the main owner of the company - the family of Konstantin Strukov. The Bonum Capital stake was valued at a premium of 15% to the price on the London Stock Exchange. Thus, the fund received approximately £34 million, or $47 million, for its package. He bought this package of Bonum Capital in July 2020 - at that time such a package, based on exchange quotes, could cost about £30.8 million ($43 million).

2020: Arrest in Moscow of one of the founders and former CEO Pavel Maslovsky

The Tverskoy Court of Moscow on December 25, 2020 arrested one of the founders and former general director of Petropavlovsk Plc Pavel Maslovsky on charges of embezzlement, Olga Bondareva, press secretary of the Tver Court of Moscow, told RIA Novosti.

Petropavlovsk Plc is among the top five Russian companies in terms of gold production. Maslovsky was detained the day before in the office.

"The court granted the investigator's request to elect a preventive measure against Maslovsky in the form of detention," Bondareva said. He will have to stay in the pre-trial detention center at least until February 23.

"It was preliminarily established that in 2018 the defendants stole the financial assets of the enterprise. The amount of damage amounted to more than 95 million, rubles"- said the official representative of the MINISTRY OF INTERNAL AFFAIRS Russian Federation Irina Volk.

According to the court, he was charged under Part 4 of Article 160 of the Criminal Code of the Russian Federation (misappropriation or embezzlement), the sanction of which provides for up to 10 years in prison.

Searches were carried out at the company's office. The press service of Petropavlovsk declined to comment on the purpose of the searches. According to company representatives, Petropavlovsk did not see the case materials, but they probably relate to "people who do not hold any positions in the company now."

Another corporate conflict in Petropavlovsk began after the arrival of a new large shareholder, Yuzhuralzolot, in early 2020. The four largest shareholders did not support the former board of directors at the annual meeting in June, including the company's founder Pavel Maslovsky. They also initiated an independent investigation into a number of transactions over the past three years, when Maslovsky served as CEO, after which he was detained.