Petropavlovsk Urges Shareholders to Back Loan Guarantees

By Oliver Griffin

Petropavlovsk PLC (POG.LN) said Friday that it will act as guarantor for two loans signed by a subsidiary of IRC Ltd. (1029.HK), which has been agreed with Gazprombank (GZPR.RS) to replace an existing loan from Industrial & Commercial Bank of China Ltd. (1398.HK).

The mining company said the decision will depend on shareholder approval but added that the board has unanimously agreed to recommend that investors support the proposed guarantees.

Petropavlovsk has a 31% stake in IRC, whose subsidiary Kimkano-Sutarsky Mining and Beneficiation Plant LLC has agreed a loan with Gazprombank worth $240 million.

Mining company Petropavlovsk, which has assets in Russia, is to guarantee the obligations of Kimkano-Sutarsky up to an initial amount of $160 million.

Petropavlovsk said the loan agreements are on much more favorable terms than the loan from ICBC, for which it currently acts as guarantor.

Kimkano-Sutarsky will use the loan from Gazprombank Facility to repay $169 million that is outstanding under the ICBC loan agreement. It will also repay Petropavlovsk the ruble equivalent of $57 million, plus fees, regarding two earlier bridging loans.

A further $6 million will be paid to Petropavlovsk regarding the guarantee the company provided under the ICBC loan.

Write to Oliver Griffin at [e-mail]; @OliGGriffin

(END) Dow Jones Newswires

February 15, 2019 03:18 ET (08:18 GMT)

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