Petropavlovsk tumbles as it struggles to find way forward

Russia-focussed gold miner Petropavlovsk was tumbling on Tuesday, after it announced that, as a result of its financial situation, it had been unable to complete the audit of its annual report and accounts for 2021.

The company also confirmed it would be unable to do so in time to comply with the publication and filing time limits under the Companies Act and the disclosure rules on the basis of its current accounting reference date.

“Accordingly, the company's board of directors has today resolved to extend the company's accounting reference date from 31 December 2021 to 28 February 2022, in order to give the company more time for the audit of its annual report and accounts for that extended period to be completed,” the directors said in their statement.

“This extension of the accounting reference period also extends the period to convene the company's annual general meeting for 2022.

“However, even with that extension, the board considers it unlikely that it will be able to complete the audit in the absence of a material change in circumstances.”

Petropavlovsk reiterated that, as it announced on 20 April, Gazprombank had demanded immediate repayment of around $201m (£160.9m) due under the company's term loan with the bank, and subsequently assigned all its rights under the term loan to JSC UMMC-Invest.

Petropavlovsk said it was unable to repay the term loan currently, adding that it considered it “very unlikely” that it would be able to refinance the loan in the short term, and had been unable to do so to date.

“The board is also mindful of the group's obligations to the holders of the $500m 8.125% guaranteed notes 2022 issued by Petropavlovsk 2016 Limited, of which $304m remains outstanding, and the convertible bonds.

“The company has not paid the most recent coupon due on the notes.”

In light of its difficulties, Petropavlovsk said it had engaged external advisors to assist in determining its course of action and available options, including the sale of its entire interests in its operating subsidiaries as soon as possible.

“That process is continuing, however it is highly unlikely that any return will be secured for shareholders as a result of that process given the level of the company's indebtedness.”

At 1305 BST, shares in Petropavlovsk were down 14.63% at 1.43p.

Reporting by Josh White at Sharecast.com.