Russian gold miner Petropavlovsk has warned investors could be wiped out as it struggles to refinance its debt amid sanctions against Moscow.
The company said it would be ‘very challenging’ to pay off a $304million convertible bond due in November because of Western sanctions on Russia following its invasion of Ukraine.
Petropavlovsk warned 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’.
Petropavlovsk said it was ‘not currently clear what return, if any’ mat be secured for investors
Petropavlovsk’s main lender, Gazprombank, has had its assets frozen by Britain, and the gold producer said it had ‘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 firm added.
As pressure mounts, the group said it had appointed advisors to explore possible options, including the sale of the ‘entire interests in its operating subsidiaries as soon as practically possible’.
Last month, Petropavlovsk revealed it had been unable to pay interest on a loan with Gazprombank due to sanctions.
Today, it said ‘regulations’ meant it was also unable to pay the rouble equivalent of around $9.5million debt it has with Gazprombank.
Petropavlovsk shares, which are still listed in London, tumbled 21 per cent to just 2.37p.
Last month it was ejected from all FTSE indices along with other Russian-focused companies, including Evraz, Polymetal International and property group Raven.
The companies were barred from holding positions on the FTSE 100, FTSE 250, FTSE 350 and FTSE All-Share Index.
But critics said the move did not go far enough as the shares are still listed on the London Stock Exchange despite their exclusion from the indices.
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