The battle over the future of the London-listed gold miner Petropavlovsk grew uglier yesterday as warring parties traded tit-for-tat insults.
The former stock market darling, which was founded by the City grandee Peter Hambro, has lost most of its value in recent years because of mounting debts and falling gold prices. Its management hopes to save the company with a $235m (£150m) rescue plan that includes a deeply discounted rights issue. The board needs 75 per cent of shareholders to back its plans at tomorrow’s meeting before it can proceed.
However, Sapinda Holdings, an activist investor founded by Lars Windhorst – a one-time protegé of the former German chancellor Helmut Kohl – has built a 10.7 per cent stake in Petropavlovsk and has said it will vote down the proposals because they are “overly favourable to bondholders”.
Sapinda offered a compromise yesterday whereby it would support the gold miner in return for a deal including a $100m placement to the shareholders it represents.
Bondholders, including hedge funds and private equity firms that control 60 per cent of the company’s $310m debt, rejected that offer, warning that Petropavlovsk will collapse unless a deal is reached.
“This proposal is inequitable and disproportionately benefits Sapinda to the detriment of existing shareholders and other key stakeholders who are further diluted,” the bondholders said.
Sapinda responded to this last night by saying: “The deal that Sapinda has proposed is better for all shareholders, and for the company – and the bondholders know it… To suggest otherwise is mere scaremongering: an attempt to frighten shareholders into accepting a deal that is good only for bondholders.”Reuse content