PETROPAVLOVSK GOLD MINING COMPANY WAS ON THE VERGE OF BANKRUPTCY

Having suffered from Western sanctions, a Russian mining company registered in London was forced to declare its own insolvency. Because of the sanctions of Petropavlovsk Plc. It is experiencing difficulties with paying about $300 million to Gazprombank, its largest lender.

On April 20, 2022, it was announced that Gazprombank demanded the immediate repayment of approximately US$ 201 million (including accrued interest). They were due under a loan agreement concluded with GPB, and subsequently all rights under the loan were assigned to the UMMC-INVEST Joint Stock Company.

In addition, the company has obligations to holders of bonds and convertible bonds (in respect of which US$ 304 million and US$ 33 million, respectively, remain outstanding).

Petropavlovsk reported that its share price has fallen by 94% over the past year.

Now the company will file an application for administrative management in the High Court of London, demanding the appointment of Allister Manson, Trevor Binyon and Joe Rolls from Opus Business Advisory Group as administrators of the company. The company also demanded to suspend trading of its shares and convertible bonds on the London Stock Exchange.

Due to the ban on providing services to Russian companies registered in London, Petropavlovsk also faced a significant outflow of its consultants.

In June, the company actually told shareholders to leave while they still could, using wording similar to Tuesday's announcement: "It is unlikely that any profit will be provided to shareholders as a result of [the sale process], given the level of the company's debt."

The company was founded in 1994 by Pavel Maslovsky and Peter Hambro, a representative of the London banking dynasty.

Petropavlovsk is one of the largest gold producers in Russia.

Lawrence Jenkins, a retail shareholder who has owned Petropavlovsk shares for several years, said that the UK government's "ill-conceived sanctions" against Russia had destroyed Petropavlovsk.

 

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