The Russian gold mining company is currently in administration owing to Western sanctions following the Ukraine conflict
Petropavlovsk entered into administration in July 2022. (Credit: Petropavlovsk)
Petropavlovsk has reached a deal to sell its subsidiary companies in Russia and a majority of its subsidiary companies in other jurisdictions to metal producer UMMC-Invest (UMMC) for $600m.
Currently, the Russian gold mining company is in administration. Last month, the company appointed Allister Manson, Trevor Binyon, and Jo Rolls of Opus Business Advisory Group as its administrators.
In administration, Petropavlovsk’s existing board of directors cease to have any powers in making any decisions, which were transferred to the administrators for managing the day-to-day operations of the company.
The sale by the Russian gold miner, which is the Guarantor, is conditional on various matters. It has a longstop completion date of 30 September 2022.
Petropavlovsk stated: “If the sale proceeds to completion (in relation to which there can be no certainty at present) the Guarantor will receive consideration with a value in excess of US$600,000,000.
“It remains unclear what return, if any, may be secured for shareholders of the Guarantor, the holders of the Bonds or the holders of other listed debt securities issued by the Group and guaranteed by the Guarantor.”
Petropavlovsk has resources of 19.50Moz Au, which include reserves of 7.16Moz Au. Its major operating mines are Pioneer, Malomir, and Albyn gold mines in Russia.
The company also operates the Pokrovskiy Pressure Oxidation (POX) Hub located in the Amur region in the Russian Far East.
It was pushed into administration in July 2022 after grappling to repay loans owed to Gazprombank because of Western sanctions put on the Russian banking company following the Ukraine conflict.