Thursday 6 August 2020 4:43 pm

Petropavlovsk shareholders set for crunch vote after months of boardroom strife

Shareholders at gold miner Petropavlovsk will on Monday vote to settle months of strife after a long-running tussle for control of the firm’s board.

Voters will choose between rival proposals investors from Prosperity Capital Management and Everest Alliance over the future make-up of the board after seven directors, including chief executive Pavel Mavlovskiy, were ousted at June’s AGM.

Read more: UGC owner denies trying to takeover Petropavlovsk ahead of crunch vote

Both sides have alleged foul play, referring each other to the Takeover Panel amid allegations that each is trying to seize control of the firm.

The former has proposed reinstating Mavlovskiy and four other directors, while the latter, which has denied claims it is working with fellow investor UGC, is seeking to add two directors to the existing board.

With one group of investors controlling nearly 40 per cent of stock, it could be a nervous wait for shareholders.

Here’s a rundown of the events of the last six months.

10 February – Petropavlovsk announces gold miner UGC, which is owned by Russian billionaire Konstantin Strukov, has become its largest shareholder, taking a 22 per cent stake in the company.

23 March – Petropavlovsk is admitted to the FTSE 250 list.

1 June – Petropavlovsk denies newspaper reports that it is in talks with UGC about a potential merger.

5 June – Petropavlovsk sets AGM for 30 June, which it says will be held behind closed doors due to coronavirus, with all votes to be in by 11 on Friday before. Petropavlovsk says shareholders will be able to listen to proceedings, but not take part.

30 June – Petropavlovsk holds its AGM

  • Prior to the AGM, Petropavlovsk announces that seven directors, including chief executive Pavel Mavlovskiy, had not been reelected to the board.
  • Four other directors, including UGC nominee Maxim Kharim, were reelected. 
  • Petropavlovsk says all votes against dismissed members came from four shareholders – UGC, Everest Alliance, Slevin and Fortiana Holdings – controlling 39 per cent of the vote. The voter turnout was 73 per cent.
  • Board issues RNS alleging that the “outcome of the voting has been engineered by Mr Konstantin Strukov’s UGC and Mr Nikolai Lustiger, (who has over the past two years represented the combined interests of Everest and Slevin)”
  • Board asks the Takeover Panel to investigate whether a concert party has acted in breach of Rule 9 of the Takeover Code.
  • Board appoints four temporary directors, including company founder Peter Hambro and acting chief executive Alya Samokhvalova, to serve until a requisitioned general meeting, to be held within three months of original meeting.
  • Petropavlovsk apologies after shareholders unable to listen in to AGM due to “unforeseen technical issues”.

2 July – Everest Alliance seeks an injunction against the appointment of Hambro and the three other temporary directors, on basis that they were “not validly appointed”.

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10 July – Court rules that Everest’s claims “arguable” but declined to make a judgement, meaning a full hearing set to follow. Hambro and co remain board members on a temporary basis.

23 July – Prosperity Capital Management, which owns 20 per cent of Petropavlovsk shares, refers UGC and the other three investors to the Takeover Panel.

Prosperity alleges that the investors acted “in concert” to seek control of the company’s board and its management.

27 July – Everest Alliance refers Prosperity to the Takeover Panel in turn, saying it is working with some members of management against the wishes of shareholders.

It also alleges that Michael Kavanagh and Vitaly Zarkhin, both put forward as independent directors, are actually linked to Prosperity.

Read more: PwC refuses to audit miner Petropavlovsk amid board room battle

28 July – PwC says that it will not audit the firm’s financial results due to the boardroom battle. It says the strife “raises concerns about corporate governance standards”. 

10 August – Requisitioned shareholder meeting to be held.

CityAM will be covering Petropavlovsk’s general meeting on Monday.