UGC acts to exercise conversion rights for Petropavlovsk convertible bonds
Uzhuralzoloto Group of Companies ("UGC") today announces that it has acted to exercise its conversion rights for its holding of 8.25% convertible bonds due 2024 issued by Petropavlovsk 2010 Limited.
UGC has converted bonds of a principal amount of USD 28,400,000. UGC expects that the Company will not exercise the cash alternative election but will allow all shareholders to convert into shares and to be treated equally in accordance with the recent Court Order.
Mr Konstantin Strukov, President of UGC, stated
“UGC recognises the potential of Petropavlovsk, but we believe that one of the company's main issues is its large debt load. To confirm our commitment to the strategic development of Petropavlovsk, we have decided to convert the company’s bonds into shares. This was intended specifically to reduce the debt load and facilitate the adoption of a progressive dividend policy by Petropavlovsk in the interests of all shareholders, especially minority ones’.
‘UGC, as the largest shareholder of Petropavlovsk, regrets the actions undertaken by the former directors who were not re-elected at the Company's AGM, and believes that the purported temporary directors, even when combined with the directors duly elected by shareholders, do not create a Board that meets the independence criteria set out in the UK Corporate Governance Code.
We hope that the current forensic investigation initiated by another Petropavlovsk shareholder, if approved at the forthcoming general meeting, will lead to an objective assessment of all of the issues being examined. We remain ready to support and engage with the Management of the company in its development and anticipate productive engagement in ensuring a beneficial outcome to the Company’s current shareholder issues”
UGC is one of the largest Russian vertically integrated gold mining companies. The Group’s deposits and gold mining assets are located in Chelyabinsk and Krasnoyarsk regions, the Republic of Khakassia, includes the Schelkovo Factory of Scrap Precious Metals in the Moscow Region as well as other assets.
For more information
Please visit http://www.ugold.ru/en/ or contact:
Alexey Ivanov Tel +7 903 797 7382
Citigate Dewe Rogerson
David Westover Tel +44 7768 897722
Louise Mason-Rutherford Tel +44 7932 681947