Russian gold miner Petropavolvska set for administration

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Petropavlovsk has requested its shares to be suspended on the London Stock Exchange after filing an administrative order in efforts to protect the business.

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The gold miner has appointed Opus Business Advisory Group to oversee the process, having been hit by financial sanctions placed on Russia following its invasion of Ukraine in February.

Petropavlovsk, which is based in London but has most of its operations in Russia, has struggled to repay loans to sanctions-hit lender Gazprombank and signaled on Tuesday it is ‘very unlikely’ to do so.

The Russian miner has requested to suspend trading in London and Moscow following its application for administration

The Russian miner has requested to suspend trading in London and Moscow following its application for administration

The Russian miner has requested to suspend trading in London and Moscow following its application for administration

The miner, which is based in London but has most of its operations in Russia, has also requested to suspend trading on the Moscow Stock Exchange.

Petropavlovsk said it is unable to repay a $201 million (£170 million) loan it owes to Gazprombank, which asked for immediate repayment in April, and will be unlikely to even service the debt in the near future.

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It is also unable to meet obligations to note and bond holders, which are still owed $304 million and $33 million, respectively.

Petropavlovsk is currently in discussions to sell all of its subsidiaries and is in discussions with one potential buyer, while another has expressed interest in the sale.

However, the board has warned that there is no guarantee of a deal and even if a sale goes through there will be no return to shareholders ‘given the level of the Group’s indebtedness’.

Over the past month, the company’s shares on the London Stock Exchange have fallen by 13.04 percent.

Since Russia’s invasion of Ukraine and the international sanctions that followed, the company has lost most of its value, with Petropavlovsk shares down 93.7 percent since the beginning of the year.

The application for administration will be heard at the High Court in London in the coming days, although an exact date is not yet known.

According to evidence filed to the Court, at the end of June the Company had assets (listed at book value) amounting to $1.62 billion; liabilities (including contingent and prospective liabilities) of $1.7 billion; and net liabilities of $84 million.

The Group has assets of around $1.68 billion; liabilities (including contingent and prospective liabilities) of $1 billion; and net assets of $673 million, at the end of May 2022.

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