TIDMPOG
RNS Number : 3933I
Petropavlovsk PLC
14 April 2022
14 April 2022
Petropavlovsk PLC
Update Regarding Gazprombank and Corporate Options
The Board (the "Board") of Petropavlovsk PLC ("Petropavlovsk" or
the "Company" and, together with its subsidiaries, the "Group")
wishes to provide a further update in relation to the implications
for the Group of the inclusion of Gazprombank ("GPB") on the UK
Sanctions List and the designation of GPB for the purposes of an
asset freeze under the Russia (Sanctions) (EU Exit) Regulations
2019 (the "Regulations"). In addition to the Regulations, the
Company is aware of reports of 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 the Regulations. If
such legislation is enacted, the Board may not be able to ensure
that its subsidiaries will comply with the Regulations in
Russia.
As previously announced, there is a US$200 million committed
term loan between the Company and Bank GPB (JSC) (the "Term Loan")
and c.US$86.7 million in revolving credit facilities (the "RCFs")
made available by GPB to certain of the Company's subsidiaries in
Russia . An interest payment of US$560,000 became due on 25 March
2022 under the Term Loan, which the Company was and remains
prohibited from making under the Regulations. In addition, on 28
March 2022, the rouble equivalent of c.US$9.5 million became
repayable under the RCFs, which also has not been paid as a
consequence of the Regulations.
As also previously announced, it is a condition of the RCFs and
the Term Loan that GPB acts as an off-taker of 100% of the Group's
gold production. GPB's designation under the Regulations prohibits
further sales of gold by the Group to GPB. The Group continues to
explore options for the sale of its gold, including to other
potential buyers, subject to GPB granting waivers. Furthermore, the
price at which the Russian Central Bank purchases gold, which
effectively limits prices offered by commercial buyers, is set
daily at levels generally below London fixing (US$1,660/oz as at 13
April 2022) and may therefore adversely affect the Group's free
cashflow.
The Group has limited cash reserves outside Russia. There are
legal restrictions in place in Russia which limit the Group's
ability to transfer cash out of Russia. The Board is mindful that
an interest payment of approximately US$12.36 million is due on 14
May 2022 in respect of the US$500 million 8.125% guaranteed notes
2022 (the "Notes") issued by Petropavlovsk 2016 Limited (of which
US$304 million remains outstanding), and that the Notes are
scheduled to mature in November 2022. In the present circumstances
the Board considers that it will be very challenging to refinance
the Notes. The Company is guarantor of payments on the Notes and on
the guaranteed convertible 8.25% bonds due 2024 issued by
Petropavlovsk 2010 Limited (the "Bonds").
The Company has appointed AlixPartners UK LLP to assist the
Board as it explores its options and determines the Company's
course of action in the best interest of all stakeholders,
including creditors and shareholders. These options include the
sale of the Company's entire interests in its operating
subsidiaries as soon as practically possible. It is not currently
clear what return, if any, may be secured for shareholders or the
holders of the Bonds or Notes as a result of this process.
This announcement contains inside information.
About Petropavlovsk
Petropavlovsk PLC (LSE: POG. MOEX: POGR) is a major integrated
Russian gold producer with JORC Resources of 19.50Moz Au which
include Reserves of 7.16Moz Au. Following its IPO on the
Alternative Investment Market (AIM) in 2002, Petropavlovsk was
promoted to the London Stock Exchange in 2009, where today it is a
Premium Listed company. The Company's shares also trade on the
Moscow Exchange and are a constituent of the RTS Index and MOEX
Index.
The Company's key operating mines (Pioneer, Malomir and Albyn)
and its Pokrovskiy Pressure Oxidation (POX) Hub, are located in the
Amur Region in the Russian Far East. Petropavlovsk has produced a
total of c.8.7Moz of gold since operations began in 1994 and has a
strong track record of mine development, expansion, and asset
optimisation.
Petropavlovsk is one of the region's largest employers and one
of the largest contributors to the sustainable development of the
local economy.
For more information
Please visit www.petropavlovskplc.com or contact:
Petropavlovsk PLC +44 (0) 20 7201 8900
John Mann / Max Zaltsman TeamIR@petropavlovskplc.com
Cautionary note on forward-looking statements
This release may include statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or
comparable terminology, or by discussions of strategy, plans,
objectives, goals, future events or intentions. These forward
looking statements include all matters that are not historical
facts. They appear in a number of places throughout this release
and include, but are not limited to, statements regarding the
Group's intentions, beliefs or current expectations concerning,
among other things, the future price of gold, the Group's results
of operations, financial position, liquidity, prospects, growth,
estimation of mineral reserves and resources and strategies, and
exchange rates and the expectations of the industry. By their
nature, forward-looking statements involve risk and uncertainty
because they relate to future events and circumstances [outside the
control of the Group. Forward-looking statements are not guarantees
of future performance and the development of the markets and the
industry in which the Group operates may differ materially from
those described in, or suggested by, any forward- looking
statements contained in this release. In addition, even if the
development of the markets and the industry in which the Group
operates are consistent with the forward looking statements
contained in this release, those developments may not be indicative
of developments in subsequent periods. A number of factors could
cause results and/or developments to differ materially from those
expressed or implied by the forward-looking statements including,
without limitation, general economic and business conditions,
demand, supply and prices for gold and other long-term commodity
price assumptions (and their effect on the timing and feasibility
of future projects and developments), trends in the gold mining
industry and conditions of the international gold markets,
competition, actions and activities of governmental authorities
(including changes in laws, regulations or taxation), currency
fluctuations (including as between the US Dollar and Rouble), the
Group's ability to recover its reserves or develop new reserves,
changes in its business strategy, any litigation, and political and
economic uncertainty. Except as required by applicable law, rule or
regulation (including the Listing and Disclosure Guidance and
Transparency Rules), the Group does not undertake any obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise. Past
performance cannot be relied on as a guide to future performance.
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END
UPDKZGMDKDMGZZG
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April 14, 2022 02:10 ET (06:10 GMT)
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