Peter Hambro faces war on two fronts as Petropavlovsk row heats up

 
Oliver Gill
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Gold bars are displayed at Shinhan Bank
Gold miner Petropavlovsk was originally called Peter Hambro Mining (Source: Getty)

Mining magnate Peter Hambro is facing a war on two fronts, as splinter groups seek to oust him from the board of Petropavlovsk.

Distressed debt investors from M&G and hedge fund Sothic Capital have called for chairman Hambro to step down. They also want to insert two new non-executive directors.

Meanwhile, Russian media reported today Renova, Petropavlovsk’s largest shareholder, was planning a backdoor coup to use the firm’s London listing to launch a new gold conglomerate.

Read more: Fight for control of gold miner Petropavlovsk as shareholders gang up

Renova, run by Ukrainian billionaire Viktor Vekselberg, wants to appoint two of its own directors. And Russian newspaper Kommersant cited un-named sources that said this was the first stage in Renova's plans to take control of the board prior to launching a takeover attempt.

Facing calls for four new appointees at Petropavlovsk’s AGM on 22 June, Hambro has agreed to step down as chairman. However, he wants to remain on the board of the firm he founded in 1994.

City sources stressed M&G and Sothic are not in working in concert with Renova.

M&G is entitled to appoint two non-executive directors. It is understood the asset manager was unhappy at having to compromise over current appointees.

Spending spree

Sources said a particular bone of contention was a plan to go on an asset “spending spree”. M&G was disappointed at the length of time it took for the board to shelve plans after it questioned such purchases.

It is understood the delay was a key factor in M&G and Sothic raising “corporate governance” concerns.

However, speaking to City A.M., Hambro said he was puzzled as to the specifics of the shareholder concerns were. “They have said nothing to us,” he said. “There was absolutely nothing substantive such that you have to get rid of the chairman and all the non-executives.”

Read more: The chair of Petropavlovsk is stepping down amid a shareholder revolt

He reiterated previous comments that the trio of investors, which own around a third of Petropavlovsk, are seeking a takeover “by stealth”.

Renova and Sothic have not responded to requests for comment. M&G declined to comment further to earlier statements that their concerns were based on “corporate governance” shortcomings.

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