Petropavlovsk to sell gold to third parties as Gazprombank waives rights
By Iain Gilbert
Date: Thursday 12 May 2022
(Sharecast News) - Russia-focussed gold miner Petropavlovsk said on Thursday that it has been issued waivers by Gazprombank that will allow it to sell gold to third parties.
Petropavlovsk, which was previously required to sell all of its gold production to Gazprombank, stated the following receipt of the waivers it has now identified new buyers and applied for a gold export licence.
However, the London-listed firm had received a notice from Gazprombank that it may revoke the waivers at any time and elect not to issue further waivers. Gazprombank also reserves the right to initiate judicial proceedings against certain Petropavlovsk subsidiaries in Russia for repayment of $87.1m due under its Russian subsidiaries' revolving credit facilities.
"If GPB were to take the action it refers to in its notice, including initiating judicial proceedings in Russia for the repayment of the RCFs (for example, by seeking an injunction to freeze the assets of the Russian subsidiaries, which the group has been advised GPB is in a position to do notwithstanding the current moratorium on bankruptcy proceedings in Russia), it would cause a material adverse effect on the group's cash flow position and limit the Russian subsidiaries' ability to meet obligations to employees and suppliers," warned Petropavlovsk.
As a result, Petropavlovsk's four main operating companies - Pokrovskiy Rudnik, Albynskiy Rudnik, Malomirskiy Rudnik, and TEMI - have all applied to the Russian government for a waiver of its current moratorium on bankruptcy filings. Once in place, Petropavlovsk said the waiver will give it additional legal options to ensure uninterrupted operations and payment of salaries and other current expenses should there be any legal action by the subsidiaries' creditors to recover debts owed.
As of 1000 BST, Petropavlovsk shares had shot up 35.74% to 2.07p.
Reporting by Iain Gilbert at Sharecast.com
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