Petropavlovsk Confirms Inability to Pay $12 Mln Coupon; Shares Dive

By Jaime Llinares Taboada

Shares in Petropavlovsk PLC plunged Monday after the company confirmed that it is unable to pay the next debt coupon because it cannot transfer cash from its Russian subsidiaries.

The Russian gold miner said the $12.4 million coupon was due on May 14, and is in respect of its $500 million notes–of which $304 million remains outstanding.

Petropavlovsk warned that it will be very challenging to refinance the notes, and that it continues to assess options including the sale of its operating subsidiaries.

“That process is continuing, and it remains unclear what return, if any, may be secured for shareholders or the holders of the group’s listed debt securities as a result of that process,” the company said.

Shares at 1058 GMT were down 26% at 1.60 pence.

In addition, Petropavlovsk said its revolving credit facilities with Gazprombank have been assigned to a new creditor, Nordic LLC. Gazprombank last month had required a $87.1 million payment due under the credit facilities, but Petropavlovsk cannot transfer money to Gazprombank due to the lender’s inclusion in the U.K. sanctions list.

The mining company said it is assessing the implications of the creditor change.

Write to Jaime Llinares Taboada at [email protected]; @JaimeLlinaresT