Petropavlovsk shareholders set for battle over control of miner
Shareholders in Russian miner Petropavlovsk are trying to mobilise investors to vote in an upcoming emergency meeting against what they claim is an attempt to take over the company by stealth.
The boardroom saga took a turn last month when Rival Russian miner UGC and other investors ousted half of the incumbent board, including chief executive Pavel Maslovskiy.
This has roused Prosperity Capital Management, which holds around 20% of Petropavlovsk. The asset manager earlier this week accused UGC and fellow shareholder Everest, an investment company controlled by Russian businessman Nikolai Lioustiger, of acting in concert to gain control without making a formal takeover offer.
Prosperity’s chief investment adviser Alexander Branis said the “true ownership” of Petropavlovsk was at stake, and urged investors to vote for six directors it would like to see elected at the August 10 meeting.
“We cannot cede control of the board to directors hand-picked by and beholden to the interests of the self-interested Everest and UGC. These concert parties are clearly trying to take over the company by stealth. We cannot risk a repeat of the AGM where a present minority outvotes an absent majority,” he said in a statement.
Petropavlovsk was forced in early June to deny it was in merger talks with UGC. The rival miner recently announced its intention to increase its to 27%t through a bond conversion.
“Once this conversion is completed, Everest, UGC, and other related parties will own around 40% of Petropavlovsk’s shares and are attempting to disenfranchise minority shareholders by taking control of the company without making a formal bid at a premium price or engaging properly with a fully independent board,” said Branis.
On Tuesday Petropavlovsk said its interim results could be delayed after auditor PwC declined to examine the firm’s books until the shareholder dispute was resolved and a new board elected.
“PwC has stated that they will await the results of the forthcoming general meeting to understand the composition of the board that will be entrusted with leading the group as well as complete satisfactory background checks on any new board member,” the company said.
Petropavlovsk broker Peel Hunt said investors “should vote to return the board to its pre-AGM position”, citing its delivery of its Pressure Oxidation facility and “a vastly improving balance sheet, as well as the ability to return to dividends”.
“News that its auditor is standing down pending clarity over the board composition should be a signal that all investors need to vote their shares at the upcoming meeting,” Peel Hunt added.