Petropavlovsk Share Discussion Threads

[route1] 25/5/2018 11:38

Galeforce & Stoopid.Read both of your posts with interest.It seems to me that once again POGIs between a rock and a hard place.One might also say from a bankersStandpoint that it is too big to fail;Having travelled on this long and arduous journey over the last 3 years.Surely Mr Rakishev was well aware Of the Big Picture when he bought circa 65m shares or 22% of the Company.As you say (and nothing has changed In the private investing community),we only have a personal choice to Make: buy sell or hold.As a long term holder with more than 22k invested ,I have no other option But to remain invested and place my Faith and trust in the BOD and hope That Mr Rakishev,s large holdingWill also have some influence

[stoopid] 24/5/2018 16:20

Galeforce, I have not suggested desperation or anything else atm regarding POG. I have just stated some facts and that current holders face a stark choice. Either wait it out, hold and hope it comes right or get out now salvage what you have in case they go under.Im not disputing that it is more than likely POG will be able to raise money to support IRC but it's still more debt upon more debt. If it can't be resolved POG will go under due to its debt burden. Also look at the figures, fcf is poor and I doubt that POG will be able to stump up £100m in 12 - 18 months time to pay that outstanding bond. This will result in an approx 15% dilution if it converts, even if they manage to negotiate this recent minefield.Total debt still stands at $500m bond + $100m bond and $240m in IRC liabilities.

[bambo1] 24/5/2018 10:22

I wonder who would be the losers and gainers if this all goes into liquidation, could this be the most lucrative option for all, but the banks and small investors.

[galeforce1] 24/5/2018 08:13

Stoopid - I think things are a bit less desperate than you suggest. In November last year POG managed to re-finance its expensive Russian bank loans with a new $500m note at 8.5%, maturing in 5 years. Decent terms that suggest reasonable confidence in the company from lenders.
So I don't think finding $31m now for IRC or paying back the $100m convertible next year is going to be that difficult.

[stoopid] 24/5/2018 06:35

It's not a pleasant situation to be in especially after the recent debt debacle were holders were diluted to hell with the rights issue and the company has never really recovered.It is now a hard choice with POG for holders. Cash out and salvage what's left or hang on in there and see if POG come through this current storm as they are on the cusp of a lot of important changes.No one wants POG to fail especially as it is one of the largest employers in a very remote area and also because the Russian govt buy all their gold.But the debt situation rumbles on with nothing paid off the main debt burden of $600m since the rights issue and the $100m bond still outstanding in 18months(which I doubt the company will be able to pay and will convert causing a further 15%ish dilution). With $240m of IRC debt they are also on the hook for that is a total debt liability of about $950m. Good luck whatever you decide. I got out at 8p two months ago and lost a lot, massively stung, always hoping that the promises made would come to fruition.They never have.

[stoopid] 24/5/2018 05:26

I suggested a while back that the IRC debt guarantee was still a very large issue.It now seems likely that unless POG secure funding from another source or manage to convince their banks that they be allowed to borrow more money in the short term to pay this then both companies may well go under......

[bambo1] 23/5/2018 18:52

No, I've lost too much money on this share, I will be here until it goes into liquidation or gives me back some or all of my losses and if everything moves in a positive direction every year for the next 5 years, who knows, I might even start showing a profit.

[galeforce1] 23/5/2018 18:07

Bambo - if you think the company is fragile you should consider selling your shares.

Personally I think there's an opportunity here. There's a lot of uncertainty - with the upcoming AGM, the IRC situation, awful UK-Russia relations, etc, etc.. But I think the mists will eventually clear and if the company can get the POX plant functioning, we'll see a share price well north of 10p. We have the same enterprise value as Highland Gold despite having almost twice the production and resources. That could change.

In effect I've taken a bet on this by buying some shares.

[bambo1] 23/5/2018 15:44

I think POG are a very fragile company and are on the brink of moving dramatically in one way or the other. Any bets.

[galeforce1] 23/5/2018 12:53

Bambo - it looks to me as though POG are going to have to stump up a short-term loan for IRC. If IRC defaults then POG could be on the line for the full $234m outstanding load guarantee (as I read it).
IRC's ramp-up seem to be going OK, if a bit less quickly than hoped. Also the Amur bridge is still not open. But in theory it's a viable business and POG's 31% shareholding should in the be worth at least as much as it's debt guarantee.
POG could find the $31.2m for a short term loan, but I wonder if there are any covenants attached to POG's existing loan notes that require the company to get permission to make further loans to IRC?

[bambo1] 23/5/2018 12:21

Things do not look or sound very good, hope we are not going to be looking at liquidation.

[bambo1] 23/5/2018 12:19

Further to Petropavlovsk PLC's ("Petropavlovsk", "the Company" or "the Group") statement in its 2017 full year announcement on 28 March 2018, the Company today provides an update on the negotiations involving the Company, IRC Limited ("IRC") and the Industrial and Commercial Bank of China ("ICBC") in relation to the US$340 million project finance facility dated 13 December 2010 between Kimkano-Sutarsky Mining and Beneficiation Plant LLC ("K&S", a wholly owned subsidiary of IRC) and ICBC (the "ICBC Facility"). Petropavlovsk has guaranteed the outstanding amounts K&S owes to ICBC, with total loan principal as at 31 March 2018 amounting to US$234 million.



Under the ICBC Facility, a payment of US$35.16m, including principal and interest, is due from K&S to ICBC on 20 June 2018. As previously announced, IRC, together with Petropavlovsk, have approached ICBC to request an amendment of the repayment schedule and to obtain waivers in respect of obligations to comply with certain financial covenants. IRC has also requested ICBC to waive the obligation to maintain certain cash deposits with ICBC. The negotiations with ICBC are continuing.



As no agreement has yet been reached with ICBC, both IRC and Petropavlovsk are pursuing a number of options to ensure the continued good standing of the ICBC Facility. These options include our previously announced discussions regarding the full refinancing of the ICBC facility with a leading Russian lender, which are now well progressed. The Company is also exploring a potential short-term advance to IRC to fund a portion of the June debt obligations if necessary. The primary objective of these discussions, as well as our pursuit of other options to ensure the continued good standing of the ICBC Facility, is to protect the value of our investment in IRC in the interests of all of Petropavlovsk's stakeholders.



As previously announced, if a missed repayment under debt or guarantee obligations in respect of the ICBC Facility occurs, or covenant requirements are not met, this would result in a default under the ICBC Facility which, through cross-defaults and cross-accelerations, could cause all of the Group's debt arrangements to become repayable on demand.

[edjge2] 23/5/2018 08:56

At 6.2p looked a bargain to me. Gold has to jump sooner or later and will allow debt pay down and usefulness of POX plant, gamechanger. Hope management situation can be sorted that does upset investors.

[bambo1] 21/5/2018 11:19

I suspect Russian politics plays a big roll in this stock and we know what that could mean.

[bambo1] 21/5/2018 11:15

The share price has certainly been looking weaker of late.

[bambo1] 21/5/2018 11:13

If Prudential are getting out, this could be a strong indicator that it's time to run.

[loganair] 21/5/2018 10:49

gale - I also compare with Trans Siberian Gold (TSG) which is far cheaper on a 'Fair Value' Basis.

[galeforce1] 21/5/2018 10:38

Loganair - that's interesting. How are you calculating 'fair value'? The comparison with Highland is interesting and certainly makes POG look quite expensive.

[galeforce1] 21/5/2018 10:36

Bambo - that RNS was on May 10th, and it may be the last one you see.

On the 'significant shareholders' page of the POG website there's a list of all shareholders with a holding over 3% (a 'notifiable interest'). Prudential is no longer among them.

Suggests that they are liquidating quite fast.

[loganair] 21/5/2018 10:35

I've been looking at this company for quite some while. I'm invested in other gold miners and in Russian companies. What continually puts me of investing here is Petropavlovsk is far too above 'Fair Value'.

[bambo1] 21/5/2018 10:17

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21 May, 2018 Home Regulatory News

Regulatory News
10 May, 2018 10:34
10 May, 2018 10:36
NOTIFICATION OF MAJOR HOLDINGS
Prudential
1,952.25
09:10 21/05/18
0.94%
18.25
Petropavlovsk
6.82
08:55 21/05/18
-0.72%
-0.05
RNS Number : 6680N
Petropavlovsk PLC
10 May 2018

TR-1: Standard form for notification of major holdings

[galeforce1] 21/5/2018 10:00

Bambo - with Prudential it will be case of 'wait and not see', because they no longer have a notifiable interest.

It wouldn't surprise me if Rakishev buys up any any remaining Prudential holding. That would tip things decisively in his favour. And ours, in my view.

[bambo1] 21/5/2018 08:51

Looks like a wait and see then, usual game continues.

[galeforce1] 21/5/2018 08:22

Bambo - Prudental no longer have a notifiable interest. In fact we don't know if they have any remaining shareholding. So it will be difficult for you to 'follow their lead'.

[craigo121] 21/5/2018 07:05

Done well with POG but moving 10% of my stock over to WEB(webis) Relaxed US gaming laws have opened up a trillion dollar market webis are perfectly POISED to take advantage 10 bagger or huge takeover target end quarter