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The mining company has selected financial advisory and global consulting firm AlixPartners UK to help the board assess options including the sale of entire interests in its operating subsidiaries.
The firm said in a statement: “These options include the sale of the company’s entire interests in its operating subsidiaries as soon as practically possible.
“It is not currently clear what return, if any, may be secured for shareholders or the holders of the Bonds or Notes as a result of this process.”
The mining firm and its subsidiaries have agreements with Russian bank Gazprombank, including a $200m (£151.6m) loan and an $86.7m revolving credit facility.
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However, Petropavlovsk said it had been unable to make loan interest payments to Gazprombank, due in March 2022, due to the UK’s sanctions on the bank.
Furthermore, the company said it can no longer sell its gold to Gazprombank that also serves as an off-taker of 100% gold production from the miner.
Petropavlovsk said in a statement: “In the present circumstances the board considers that it will be very challenging to refinance the notes.”
Petropavlovsk’s assets are located in the Amur Region in the Russian Far East. These include operating mines – Pioneer; Malomir; and Alby, as well as the Pokrovskiy Pressure Oxidation (POX) Hub.