Crunch shareholder vote will decide battle for Petropavlovsk’s future
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.