Petropavlovsk - Re: POG Stream Log - Has sanctions destroyed this company...

Has sanctions destroyed this company - or are we actually seeing a pattern of long term kleptocracy by the Putin government who imprisoned the owner more than a year ago, with no charges? Petropavlovsk (POG.L) plans to file for administration this week as the indebted gold producer struggles to refinance its borrowings and seeks a buyer for its mines in Russia’s far east. The company, which on Tuesday asked for trading in its shares to be suspended in London, said it would seek a hearing at the High Court in the “coming days”. Its move to appoint Opus Business Advisory Group as administrator is the latest twist for the company that was once the biggest gold miner listed on the London Stock Exchange and almost clinched a place in the blue-chip FTSE 100 index. Petropavlovsk was founded in 1994 by Pavel Maslovskiy with Peter Hambro, a scion of the London banking dynasty, and is one of Russia’s biggest gold producers. But after years of boardroom turmoil as a succession of wealthy businessmen took large stakes and fought for control of the company, it has been brought down by the war in Ukraine. The company was plunged into crisis this year after the UK imposed sanctions on its main lender Gazprombank following Russia’s invasion of Ukraine. A special tag-in for paddingtonbear and soundmoney as this might equally have gone into one of their many mining threads, (although clearly POG is no junior) and may miss it in this more general thread. The share price tells the more recent take of woe linked to the Ukraine invasion though, and the company has no existing thread on Barcplus, and looks now like it never will have! It had been one of the few Russia-focused groups with shares still trading in London until they were suspended on Tuesday. Petropavlovsk also wants trading in its Moscow-listed shares halted. Petropavlovsk had borrowings and gold sale agreements with the banking offshoot of the state-controlled Russian gas group. These included a $200mn loan and an $86.7mn credit line. In addition, Gazprombank purchased and sold all of Petropavlovsk’s gold production. Gazprombank demanded immediate repayment of its loans in April but later assigned the rights over the $200mn loan to Ural Mining Metallurgical Company, a big Russian metals producer. The rights to the credit line were assigned to an investment company called Nordic. In a statement, Petropavlovsk said it was “very unlikely” that it could refinance the $200mn loan in the near term. It did not mention the credit line. UMMC did not immediately respond to a request for comment. As well as bank debt, Petropavlovsk has $300mn of principal outstanding on a bond due to mature in November that it is struggling to refinance. The company said it was in talks with two parties interested in buying its operation assets but warned there was no certainty of a “return” for shareholders given its level of debt. Petropavlovsk’s biggest shareholder is Russian businessman Konstantin Strukov. He owns a 29 per cent stake. In Tuesday’s announcement, Petropavlovsk included statements that it plans to file with the High Court in London. One said the company had assets of about $1.62bn at the end of June and prospective liabilities of $1.7bn. Its shares closed at 1.2p on Monday, down from 19p at the start of the year. At that price, its equity is valued at less than £50mn. In Moscow its shares plunged 38 per cent to Rbs2.375.