Russian gold miner files for administration

It comes as it has been struggling to repay loans owed to Gazprombank due to sanctions imposed on the Russian lender. 

In April 2022, Gazprombank demanded immediate repayment of a loan of approximately $201m (£167.1m). Petropavlovsk has subsequently said it would be unable to “refinance” this in the short term and has to date been unable to do so. 

In addition to this, the board said it’s mindful of its obligations to the holders of the notes and convertible bonds - of which $304m (£252.8m) and $33m (£27.4m) remain outstanding. 

In a statement published when it made its application to go into administration (12 July), the company also said it’s exploring the sale of its entire interests in its operating subsidiaries. To date, it has received an offer from one party to acquire and a proposal from another expressing interest in the acquisition of those subsidiaries. 

Discussions with both are ongoing, however there’s no certainty that either will result in a sale and it has said it’s “highly unlikely” there will be any return to shareholders given the level of its indebtedness. 

Yesterday (18 July) administrators Allister Manson, Trevor Binyon and Jo Rolls of Opnus Business Advisory Group were officially appointed to the company. 

In administration, its existing board of directors has ceased to have decision-making powers with immediate effect. These powers have since been transferred to the administrators who have in turn taken up responsibility for the day-to-day running of the company.