The bondholder treatment at the heart of the Petropavlovsk brawl
The battle for control of Petropavlovsk has been raging since the board and management were unexpectedly voted out at the company’s AGM in June. But only now has it become clear the role a conversion of bonds may have played in the process. At issue are allegations of unequal bondholder treatment.
For much of the year, the mining community has been entranced by a boardroom battle at London-listed Russian gold mining company Petropavlovsk, a clash that has involved the ousting of the founders, court disputes, a complaint to the Takeover Panel of the London Stock Exchange, the departure of auditors and the sight of a temporary CEO breaking into his own offices in Moscow.
It has now emerged that one of the key fields of the battle is a question about the treatment of convertible bondholders, a matter that may have impacted the question of control of the company and its assets. The allegations have come to light through witness statements seen by Euromoney in a separate interim relief claim before an employment tribunal.
First, the background.
Petropavlovsk was founded as Peter Hambro Mining in 1994 by Hambro himself and Pavel Maslovskiy.
It owns assets in the Russian Far East, specifically Amur Oblast, which borders China to the north of Heilongjiang.
It was listed on the Alternative Investment Market in 2002, then the main board of the London Stock Exchange in April 2009, changing its name to Petropavlovsk PLC in September that year.