Petropavlovsk’s assets are estimated at $1.62 billion and do not cover all liabilities
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Securities Petropavlovsk for the day collapsed by 40% and updated the historical minimum – 2.27 rubles apiece.
The Russian company Petropavlovsk, one of the top 5 gold miners in the Russian Federation and producing about 14 tons per year in the Far East, is launching insolvency proceedings. It is reported on her website on Tuesday 12 July.
The company announced that the board of directors has decided to apply to the court to appoint Alistair Manson, Trevor Binyon and Joe Rolls of Opus Business Advisory Group as outside managers.
At the same time, Petropavlovsk applied for the withdrawal from trading in London of ordinary shares and convertible Eurobonds maturing in 2024.
As writes The Moscow Timeswhich owns four plants in the Amur Region, the company was not included in any of the sanctions lists, but the British “registration” blocked international financial transactions for it, and difficulties with the export of gold put an end to plans to pay off debts.
In March, the London Bullion Market Association (LBMA) excluded Russian refineries from the list of trusted suppliers (Good Delivery). As a result, Russian gold exports came to a virtual halt: while extracting almost a ton a day in March and April, Russia was only able to sell abroad just over 100 kg.
In April, Gazprombank demanded early repayment of a $201 million loan from Petropavlovsk, including interest. Then the rights of claim on this loan were transferred to the Ural Mining and Metallurgical Company (UMMC), but this did not free the gold miner from early repayment of obligations. Another $300 million the company needs to repay by issuing Eurobonds in December.
Petropavlovsk’s assets are estimated at $1.62 billion and do not cover all liabilities ($1.7 billion). The net worth of the company thus became negative.
In June, the company postponed its 2021 financials audit and released the results on time, and its shares topped the underdog chart on the Moscow Exchange, down 82% year-to-date and 11x from 2020 highs. On Tuesday, the papers of Petropavlovsk collapsed by another 40% and updated the historical minimum – 2.27 rubles apiece.
As a reminder, at the end of May Russia’s economy has accelerated the decline one and a half times – by 4.3% year-on-year after a decrease of 2.8% in April.
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