Petropavlovsk PLC Refinancing Approval (5145Q)

TIDMPOG

RNS Number : 5145Q

Petropavlovsk PLC

30 November 2016

Petropavlovsk PLC

$530 million Refinancing Approved

Petropavlovsk PLC ("Petropavlovsk" or the "Company" or, together with its subsidiaries, the "Group") is delighted to announce the following:

Refinancing Highlights

-- The Company has received approvals for the refinancing of the Group's entire bank debt totaling US$529.8 million with the lending banks, Sberbank (75% of total bank debt) and VTB (25% of total bank debt) (the "Lenders"). Terms are subject to final documentation and completion of conditions precedent.

-- The approved terms include a revised maturity profile from May 2018 to September 2022 (inclusive of option to extend the 2019 maturity payment to 2022 upon certain conditions being satisfied) and effective average interest rate of c.8%.

-- The extended maturity profile of borrowings is now successfully aligned with the Company's production profile, expected cash generation and growth capital expenditure plans.

-- Following the completion of an independent technical report the Lenders have agreed the schedule supporting the Company's development of the Pressure Oxidation Project ("POX Hub").

-- On the basis of the highly positive economics projected, the proposed refinancing allows the Group to self-fund the POX Hub out of free cash flow.

-- The Company announces that it is no longer pursuing the proposed joint-venture process with GMD Gold but remains in constructive discussions with GMD Gold to establish whether an alternative agreement can be reached for the mutual benefit of both parties.

-- The schedule of works for the development of the POX Hub is currently projected for the commissioning by the end of 2018.

Commenting, Peter Hambro, Chairman said:

"I am delighted to report that the relevant internal approvals of Sberbank and VTB have separately been received. Both lenders have been extremely supportive and the Group can now look forward to a stronger and more secure financial future.

Significant extension of maturity profile allows the Company to pursue its strategic goals and objectives and demonstrates that the Lenders share our view of the strategic importance and value of the POX Hub. We value our relationship with GMD Gold and are continuing discussions with them to explore whether there is an alternative arrangement that will benefit both parties."

Refinancing Approved Terms

Senior Secured Term Loan Facility

Sberbank and VTB, the Group's lenders, have received formal internal approvals for the refinancing of US$395 and US$135 million bank facilities, respectively.

All terms are subject to final documentation and completion of conditions precedent.

The proposed Sberbank and VTB terms provide for a following revised repayment schedule (including option to extend from 2019 to 2022): 2017 US$40.6 mln, 2018 US$55.5 mln, 2019 US$122 mln, 2020 US$93.5 mln, 2021 US$124.7 mln, 2022 US$93.5 mln.

This aligns the Group's debt maturities with the Company's production profile, expected cash generation and growth capital expenditure plans.

An option to extend is subject to the following conditions being satisfied:

   --     Operational completion of the POX plant in 2019; 

-- Total Consolidated Net Debt to EBITDA ratio for 12 months ending on June 30, 2019 less than or equal to 2.5:1;

-- Evidence of funds and/or confirmation that convertible bonds due 2020 will be repaid in full by means of conversion into Petropavlovsk equity or the maturity is extended and subordinated to the banks loans new repayment schedule (after extension)

"This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014."

About

Petropavlovsk PLC

Petropavlovsk is one of Russia's leading gold mining companies. We operate some of the largest gold mines in Russia in terms of their gold production output, processing capacity and resource base. Furthermore, our assets have untapped exploration potential. We are a leading employer and contributor to the development of the local economy in the Amur region, Russian Far East, where we have operated since 1994. As at 31 December 2015, we have produced approximately 6Moz of gold.

The Company is listed on the Main Market of the London Stock Exchange (Ticker POG:LN)

Sberbank

Sberbank is Russia's largest bank and a leading global financial institution. Sberbank holds almost one third of aggregate Russian banking sector assets, it is the key lender to the national economy and the biggest deposit taker in Russia. The Central Bank of the Russian Federation is the founder and principal shareholder of Sberbank owning 50% of the Bank's authorized capital plus one voting share, with the remaining 50% held by domestic and international investors. Sberbank has more than 135 million individual customers and more than 4 million corporate clients in 20 countries. Sberbank has the largest distribution network in Russia with almost 17,000 branches, and its international operations include UK, US, CIS, Central and Eastern Europe, India, China, Turkey and other countries.

The Bank holds the general banking license No.1481 issued by the Bank of Russia. Official websites of the Bank: (Sberbank Group website)

Sberbank CIB

Sberbank CIB is the corporate and investment banking business of Sberbank. Its key areas of activity are corporate finance (including trade finance), the documentary business2, investment banking services, trade operations with securities, and private equity. Sberbank's corporate and investment banking business provides integrated financial solutions and investment advisory services to its clients, which include major corporations, financial institutions, sovereign states and federal and sub-federal government bodies and organisations.

Sberbank CIB is one of the largest operators on the Russian precious metals market; providing a full suite of solutions for corporate clients and financial institutions across the precious metals spectrum and around the world.

VTB Group

VTB Group is a global provider of financial services, comprised of over 20 credit institutions and financial companies operating across all key areas of the financial markets. VTB Group is a holding company with one strategically aligned development model, including a common brand, centralised financial and risk management, and integrated compliance systems. VTB Group's global network is unique to the Russian banking industry. It enables the group to facilitate international partnerships and promote Russian companies aiming to engage with global markets.

VTB Group operates a large international network across CIS countries; Armenia, Ukraine, Belarus, Kazakhstan and Azerbaijan. VTB also has banks in Austria, Germany and France which are part of a European sub-holding with VTB Bank (Austria) acting as the parent bank for Germany and France. The Group also has subsidiary and affiliated banks in the United Kingdom, Cyprus, Serbia, Georgia and Angola and branches in China and India and VTB Capital has branches in Singapore and Dubai. The majority shareholder of the VTB Bank is the Russian Government, which owns 60.9 percent of the voting shares.

ENQUIRIES

 
 Petropavlovsk PLC 
                      [phone] 
 Alya Samokhvalova               8900 
 Alexandra Carse 
 
 
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Note: Figures throughout this release may not add up due to rounding.

Forward-looking statements

This release may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this release and include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial position, liquidity, prospects, growth, strategies and expectations of the industry.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the development of the markets and the industry in which the Group operates may differ materially from those described in, or suggested by, any forward-looking statements contained in this release. In addition, even if the development of the markets and the industry in which the Group operates are consistent with the forward-looking statements contained in this release, those developments may not be indicative of developments in subsequent periods. A number of factors could cause developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in law or regulation, currency fluctuations (including the US dollar and Rouble), the Group's ability to recover its reserves or develop new reserves, changes in its business strategy, political and economic uncertainty. Save as required by the Listing and Disclosure and Transparency Rules, the Company is under no obligation to update the information contained in this release.

Past performance cannot be relied on as a guide to future performance.

The content of websites referred to in this announcement does not form part of this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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November 30, 2016 02:04 ET (07:04 GMT)