Troubled Russian gold producer Petropavlovsk has confirmed it is considering the sale of its operating subsidiaries, amid growing operational difficulties in the West as it ramps up sanctions on Russia.
It has appointed consulting firm AlixPartners to guide the company through the current turbulence, as the miner explores its options.
This follows the inclusion of Gazprombank on the UK’s sanctions list last month, where Petropavlovsk has a $200m loan.
The loan involves $86.7m in revolving credit facilities.
The latest regulations have prevented the company from making an interest payment of $560,000 to Gazprombank, which was due on 25 March 2022 under the terms of its loan.
Even more pressingly, an interest payment of approximately $12.36m is due on 14 May 2022.
The company has limited cash reserves outside Russia, an escalating issue with restrictions in the country limiting the group’s ability to transfer cash into Western markets.
There is also proposed Russian legislation to make it a criminal offence for persons or entities in Russia to refuse to deal with counterparties on the grounds of new UK regulations.
Petropavlovsk has warned that if such legislation is enacted, the board may not be able to ensure that its subsidiaries will comply with the regulations in Russia.
The company’s shares have tanked from 13.7p per share to 1.8p, following Russia’s invasion of Ukraine, with Petropavlovsk’s key operating mines located in the Amur Region in the Russian Far East.