Sapinda calls on Petropavlovsk to postpone GM

 
Ollie Gordon
Petropavlovsk described Sapinda's proposal as “absurd and unworkable” (Source: Getty)

Sapinda, a key shareholder in Petropavlovsk, yesterday elaborated on its mooted alternative refinancing plan for the Russia-focused gold miner and implored its board to delay the imminent general meeting, in the latest skirmish for the London-listed miner’s future.

Petropavlovsk responded immediately, describing the Amsterdam-based investment fund’s proposal as “absurd and unworkable”.
In an open letter to Petro­pavlovsk, investment group Sapinda called on the board to “postpone the general meeting to give the company, and shareholders, sufficient time to consider the alternative recapitalisation.”
Indicating a “basis for an alternative proposal”, Sapin­da suggested the following:
Petropavlovsk has two issues at a different price, one of which is underwritten by Sapinda along with other parties and the other underwritten by the bondholders on the same basis of the existing agreement;
The Sapinda-underwritten rights issue is used to inject money into the company to be used for working capital purposes and debt reduction. Sapinda said it was willing to underwrite an issue of $100m (£65m).
The bondholder issue price would be “at least” 40p to reflect changes in rouble exchange rate and gold price since talks began that have increased the value of the company.
The new $100m bond to be issued to bondholders would not be convertible into ordinary shares.
A Petropavlovsk spokesperson told City A.M.: “Two right issues at different prices is absurd and unworkable. It’s never been done before – its fantasy-land stuff.”

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