Russia-focused gold miner Petropavlovsk last night saw its proposed debt restructuring come under fire after one of its major stakeholders blasted the plan for allegedly favouring bondholders over shareholders.
The proposed plan is due to be voted on this month but requires the approval of both bondholders and 75 per cent of shareholders to go ahead.
Sapinda, an Amsterdam-registered private investment vehicle owned by German entrepreneur Lars Windhorst, said yesterday that itself and other investors had acquired a 10.7 per cent stake in the beleaguered miner and were looking to force the company’s board to renegotiate a deal that it feels is more equitable to shareholders.
The fund said it would vote against the current plan in the general meeting and that it was drawing up an alternative recapitalisation programme which was fairer to shareholders and would see the fund invest “a substantial amount of money” in the London-listed miner.
As part of the current restructuring plan, Petropavlovsk launched a strongly discounted and dilutive rights issue, at a ratio of 157-for-10, earlier this month to raise up to $235m (£153m), alongside issuing $100m of new five-year convertible debt. The firm’s founders, Peter Hambro and Pavel Maslovsky, also pledged to invest $30m.
But Tim Whyte, Sapinda’s chief operating officer for natural resources, told City A.M.: “ The proposal is wholly unfair. It will result in bondholders and those inside management, which is Hambro and Maslovsky, owning 95 per cent of the company’s shares. And if you think about it, if 95 per cent of the company is ultimately looking to sell, why would anyone buy the company after the transaction? The ultimate conclusion is that Petropavlovsk will just limp ahead as a zombie company going forward.”