Crunch share­holder vote will de­cide bat­tle for Petropavlo­vsk’s fu­ture

The Daily Telegraph - Business - - Business - By Rachel Mil­lard

A BAT­TLE for con­trol at a ma­jor Rus­sian gold miner is com­ing to a head with a crunch share­holder vote due next Mon­day.

Chief ex­ec­u­tive Pavel Maslovskiy and other di­rec­tors were booted off the board of Petropavlo­vsk in June as part of what op­po­nents claim is an at­tempt by largest share­holder and ri­val UGC and oth­ers to gain con­trol of the FTSE 250 com­pany on the cheap.

Next week share­hold­ers will have to choose be­tween di­rec­tors, in­clud­ing Dr Maslovskiy, put for­ward by 15pc share­holder Pros­per­ity Cap­i­tal Man­age­ment, a Rus­sia-fo­cused as­set man­ager, and those put for­ward by 7.5pc share­holder Ever­est, con­trolled by Rus­sian busi­ness­man Niko­lai Lustiger.

The Takeover Panel has been asked to in­ves­ti­gate con­cerns from com­pet­ing sides that 23pc share­holder UGC, con­trolled by Rus­sian bil­lion­aire Kon­stantin Strukov, is act­ing in con­cert with Ever­est to wrest con­trol of the com­pany with­out pay­ing a pre­mium, as well as that Pros­per­ity is act­ing with some in­side Petropavlo­vsk to do the same. All sides deny do­ing so.

PwC has re­fused to au­dit the com­pany’s books un­til the lat­est chaos is re­solved. The pow­er­ful share­holder ad­vi­sory ser­vice ISS waded in last week, back­ing Pros­per­ity’s nom­i­nees.

Petropavlo­vsk’s shares have nearly tripled this year to 36p, boosted by its new spe­cialised gold pro­cess­ing plant. Sales rose 39pc to 514,000 ounces dur­ing 2019. It ex­pects to start pay­ing a div­i­dend, pos­si­bly as soon as this year.

ISS found: “From a mi­nor­ity share­holder per­spec­tive, the main con­cern at present is the pos­si­bil­ity that a small group of share­hold­ers, in­clud­ing the com­pany’s com­peti­tor and largest share­holder UGC, Ever­est and the par­ties al­legedly act­ing in con­cert with them, takes con­trol of the com­pany with­out pay­ing a con­trol pre­mium.”

How­ever, it also backed a res­o­lu­tion by Ever­est to get an in­de­pen­dent in­ves­ti­ga­tion done into the com­pany’s trans­ac­tions over the pre­vi­ous three years.

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