Petropavlovsk operations continue uninterrupted despite Ukrainian conflict
By Iain Gilbert
Date: Wednesday 09 Mar 2022
(Sharecast News) - Russia-focussed mining outfit Petropavlovsk said on Wednesday that its operations were currently carrying on without interruption despite the ongoing conflict in Ukraine.
Petropavlovsk stated no members of the group had been named in sanctions against Russia announced by the United Kingdom, United States, European Union and other nations and said "appropriate systems and procedures" had been put in place to verify that it was not conducting restricted forms of business with any sanctioned parties.
However, the FTSE 250-listed firm did caution that "significant risk" was posed by the potential disruption to its supply chain despite management initiating contingency planning on day one of the crisis to mitigate risk and ensure that operations continued uninterrupted.
"Petropavlovsk will continue to identify and analyse potential risks to its business as a result of sanctions, countermeasures adopted by the Russian Federation, and trading decisions announced by private companies," said the firm.
Petropavlovsk, which said it was continuing to sell gold to domestic commercial banks at London fixing and was not affected by export controls at this time, stated it has "sufficient funds" available to service current debt but added management was still examining opportunities for refinancing the remainder of its $306.0m 8.125% guaranteed notes due to mature later in the year.
In a separate statement, Petropavlovsk said it was aware of the provisions in the UK's new Russian sanctions in relation to dealings with transferable securities or money market instruments issued by certain sanctioned entities or persons connected with Russia and, after having taken legal advice on the issue, does not consider its shares or debt instruments to be restricted securities.
Petropavlovsk said it did not expect to be subject to sanctions due to being based in the UK and that, "to the company's knowledge", no restricted individual or entity owns more than 50% of its shares or voting rights.
"In the event that the company's interpretation of the regulations proves to be incorrect, or if circumstances otherwise change such that the company becomes subject to the restrictions set out in Regulation 16 of the regulations, any person who, directly or indirectly, deals with securities issued by the company after 1 March 2022 in circumstances where that person knows or has reasonable cause to suspect that he or she is dealing with securities which are subject to the regulations may be guilty of committing an offence," concluded the firm.
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