The embattled board of gold miner Petropavlovsk has received support from two influential advisory groups in the face of shareholder attempts to oust it.
The board has been backed by advisory groups ISS and Glass Lewis which recommend that shareholders vote for the existing board and oppose the attempts to remove it.
Last month, shareholders called Cabs Platform and Slevin, which together hold 9.11 per cent of the business, called the return of former directors Pavel Maslovskiy, Roderic Lyne and Robert Jenkins.
In its report Glass Lewis criticised what it called the “dissidents” for a lack of concrete arguments for ejecting the current board, noted the short-term nature of their investment and queried the lack of transparency as to who the ultimate controllers of Cabs and Slevin are.
The dissidents argue that the current board has underperformed with Petropavlovsk’s share price stagnating despite strong market growth in gold.
ISS said: “The arguments put forward by the requisitioning shareholders, Cabs and Slevin, in their brief letter to the board lack substance. The fact that the requisitionists have not disclosed their beneficial owners also raises significant concerns about their true intentions.”
Lyne, the dissident’s chairman of choice, said: “The proxy agencies have not yet spoken to the proposed board, which has plans to restore effective leadership and momentum to Petropavlovsk and develop the company’s long term future. They should have a complete picture before making their final recommendations. The proposed management team and requisition shareholders stand ready to talk to them at any time. The key is to deliver better value to the shareholders and assure the company’s future”
Separately, reports in the Russian media this weekend suggested that Petropavlovsk was looking to sell a key processing plant and development project.
The pressure oxidation plant is due to go into operation later this year.
Chief executive Roman Deniskin denied any plans to sell the assets.
“Pox is not for sale. I and the board have been very clear about our strategy to build value for all stakeholders – namely to harness the considerable value of our asset portfolio. Having recently visited our operations last week, I can confirm that commissioning of Pox remains on track and within budget for Q4 2018, which will allow Petropavlovsk to monetise our considerable refractory reserve base, and produce low cost gold ounces on a long term and sustainable basis,” he said.
Petropavlovsk’s annual meeting is due to be held on 29 June.