Petropavlovsk doesn’t have all the gold that the director

The gold mining company again has a conflict of shareholders with management.
02.07.2020
Kommersant
Origin source
In one of the largest Russian gold miners Petropavlovsk there was a corporate conflict. The main shareholders of the company, including Yuzhuralzoloto Konstantin Strukov, did not support the candidates for the board of directors recommended by the board, including the director general and founder of the company, Pavel Maslovsky. The board is asking the British regulator to investigate, suspecting that Mr. Strukov has directed the vote. The conflict comes amid rumors about a deal to merge Petropavlovsk and Yuzhuralzoloto. In the history of Petropavlovsk there was already a similar dispute with the shareholder - Renova Viktor Vekselberg, who also had plans to consolidate the industry.

The largest shareholders of Petropavlovsk, including Yuzhuralzoloto Konstantin Strukov, did not support the nomination of its former members to the board of directors at the annual meeting, including the founder and CEO Pavel Maslovsky. The company’s statement said that Everest Alliance and Slevin (12.09% in total) and Fortiana Holdings (4.62%) also voted against Mr. Maslavsky and other candidates recommended by the board. At the same time, Vladislav Sviblov, through Fortiana Holdings, sold most of his stake on the eve of the conflict.

According to the management, the voting results were directed by Mr. Strukov and Nikolai Lustiger, who over the past two years represented the joint interests of Everest and Slevin. It is alleged that he was in close contact with Mr. Strukov even before Yuzhuralzoloto acquired a stake in Petropavlovsk.
The board is asking the British authorities to investigate violations of the M&A law. The vice-president of Yuzhuralzolot Alexei Ivanov told news agencies that the company operates in the legal field and in the interests of shareholders, negotiations with which were conducted only on the strategic development of the company.

Corporate conflict takes place amid rumors about the merger of Petropavlovsk and Yuzhuralzoloto. In early June, the British The Daily Telegraph reported that both companies are considering the possibility of creating a joint venture. Then Pavel Maslovsky told the publication that negotiations were at an early stage, and a deal was possible. However, then a refutation was actually published on the gold miner's website. “Petropavlovsk notes the recent press speculation about a possible corporate deal with its major shareholder, the Yuzhuralzoloto group of companies, a private Russian gold mining company. Despite the fact that the company maintains an active dialogue with all shareholders, at present it does not participate in discussions on transactions with SGC, ”the report said.

Yuzhuralzoloto will build an enterprise in the Chelyabinsk region for $ 250 million
Yuzhuralzoloto Konstantin Strukov acquired a 22.37% stake and 5.97% convertible bonds Petropavlovsk from Roman Trotsenko, co-owner of AEON Corporation, in February this year. Then Mr. Strukov noted that Petropavlovsk has great growth potential, and emphasized that the company owns a unique autoclave production, which allows the development of hard ore deposits.

Sources of Kommersant say that initially Mr. Strukov had no plans to merge companies, but subsequently this position could change.
The extraction of the combined company may amount to 30 tons of gold (according to the results of 2019, the production of Yuzhuralzoloto amounted to 13.9 tons, Petropavlovsk produced 16 tons). Ala Samokhvalova, appointed by the CEO until the next meeting of shareholders and who was the deputy of Pavel Maslovsky, told Kommersant that the shareholders of Petropavlovsk had not expressed any complaints about the work of the company, whose quotes had tripled over the past six months. According to her, negotiations on a merger between Petropavlovsk and Yuzhuralzoloto were not conducted.

This is not the first joint conflict in the history of Petropavlovsk. In 2017, Renova, which was then a shareholder of the company, and its supporting funds Sothic and M&G, announced that they intend to vote against the re-election of the founder of the company Peter Hambro and three independent directors to the board of directors. After the victory of the candidates from Renova, the CEO and the board of directors left Mr. Maslovsky. Kommersant sources familiar with the situation said that Renova wanted to gain control in Petropavlovsk, and then merge the company with its Kamchatka Gold. Later, however, Viktor Vekselberg’s company sold its stake without presenting Petropavlovsk’s development strategy.

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