Everest seeks to oust Petropavlovsk directors after court hearing fails

By

Sharecast News | 10 Jul, 2020

Updated : 09:11

A Petropavlovsk investor has called a shareholder meeting to remove Peter Hambro and four other directors after a judge failed to rule that most of the appointments were invalid.

The Russian goldminer said it would hold a general meeting at the request of Everest Alliance, which holds about 7.5% of the company's shares.

Everest wants Hambro, Alya Samokhvalova, Johnny Martin Smith, Martin Smith and Angelica Phillips to leave the board. On Thursday Mr Justice Mann found that Everest's complaints about four of the directors' appointments were arguable but said the matter should go to a full hearing. Martin Smith was not included in the court hearing.

"As a result, pending the outcome of a further hearing on the application, the date of which will be set in due course, the temporary directors will remain as temporary directors of the company, subject to the terms of a revised order by the court," Petropavlovsk said.

Everest has proposed two new directors and wants four current directors to be kept on before the meeting. It also wants any director appointed since 9 July to be removed until the meeting.

The investor's move is the latest round in a convoluted battle over control of Petropavlovsk. On 30 June the board accused its biggest shareholder, UGC, of acting in concert with other investors to oust executive and non-executive directors, including Chief Executive Pavel Maslovskiy, and instal their choices.

Hambro, who was ousted from the board in an earlier upheaval returned to the company and was made interim chairman.

The original board said 22% shareholder UGC, run by Russian billionaire Konstantin Strukov, had indicated it would vote for the existing directors, leading to a low voting turnout by independent shareholders who would otherwise have backed the original board. The result was that UGC and the other investors took effective control of the company without paying a premium, the original board alleged.

Petropavlovsk said it received Everest's requisition shortly after Thursday's court hearing. "The company confirms that a notice convening the [general meeting] will be sent to shareholders in due course," it said. Aurora nominees, which represents 11.4% of the company's voting rights, had already requested a separate general meeting.

Sam Catalano, an analyst at Canaccord Genuity, said: "Recent news flow has raised board-level concerns for the market with regard to Petropavlovsk. Resolution of the current board-level volatility will be the key driver of the stock in the short-term."

Catalano, who recommends buying Petropavlovsk shares, said the matter was likely to be resolved by the original board members being reinstated and that there was no changed to the company's fundamental business.

"If nothing else, recent events suggest to us that Petropavlovsk's assets are considered attractive enough by others such that they attract great interest from industry players," he said.

Petropavlovsk shares rose 2.5% to 26.70p at 09:09 BST. The shares have more than doubled in 2020 as the price of gold has risen during the Covid-19 crisis but the shares have fallen from a 2020 peak of 32p during the boardroom struggle.

åç

Last news