Petropavlovsk PLC Preliminary Agreement for the Proposed Termination of IRC Guarantees and the Disposal of 29.9% of the Company's Interest in
This preliminary agreement includes the proposed terms on which Stocken would agree to purchase from Petropavlovsk 2,120,922,527 IRC shares (representing 29.9% of IRC's outstanding shares at today's date), for a cash consideration of
If the consent of GPB is received and the parties enter into a SPA, completion of that SPA will be conditional upon: Termination and irrevocable release of the Group from all loan guarantees given to Gazprombank ('GPB') under the facility agreements signed between
If a SPA is entered into ('Signing'), the release of the Guarantees ( or at least the execution of legally binding agreements which provide for the termination of such), is expected to be achieved within 180 days from the later of Signing and Consent, or such later date as agreed by the parties, failing which the agreement will terminate.
If Stocken is unable to demonstrate satisfactory progress in meeting this deadline within 90 days from the later of Signing and Consent, and which it cannot resolve within 10 business days, any SPA may be terminated by Petropavlovsk on 5 business days' notice provided that Gazprombank has not released or agreed to release Petropavlovsk from the Guarantees by this time.
Under the preliminary agreement, it is proposed that following Signing, the shares held in IRC by Petropavlovsk will be transferred to Stocken within 10 business days of the later of the Guarantees being released and Petropavlovsk's noteholders consenting to the transaction, if required ('Completion'). A cash consideration of
Under the preliminary agreement, it is proposed that the SPA will include a put option ('Option'), which may be exercised by Stocken, to provide them with a period of time to complete additional due diligence in relation to their equity investment in IRC. It is not proposed that the Option may be exercised should there be a deterioration in IRC's performance (as outlined below) and thus would incorporate downside protection for Petropavlovsk.
The proposed Option is proposed to be capable of exercise by Stocken between the date of Completion and full payment of the Consideration or
The proposed Option would also provide downside protection to Petropavlovsk in the event of a deterioration in IRC's financial performance during this period, whereby the exercise of the Option is wholly dependent upon IRC's financial performance remaining within the following thresholds: (i) a net debt of less than
Whilst Stocken and the Company have entered into the preliminary agreement, there can be no certainty that GPB will consent to Petropavlovsk entering into the SPA, the terms of the SPA and whether GPB will agree to release the guarantees or the terms on which it will agree to do so.
Petropavlovsk's remaining 84,977,473 shares in IRC, equating to an interest of c.1.2%, are not proposed to be subject to the SPA.
Dr
The guarantee has a negative impact on our credit rating which increases the cost of our debt. We expect that the release from the guarantee would improve the Company's credit profile and assist the ongoing momentum of Petropavlovsk's equity and debt re-rating. As a result, we believe that the
I look forward to working with both Stocken and Gazprombank to enter into the SPA and ultimately successfully complete this transaction'.
The information contained within this announcement is considered by
About Petropavlovsk
With a Premium Listing on the
The Company's key operating mines (Pioneer, Malomir and Albyn) are in the
The Group recently entered a new era of growth following the successful commissioning and start-up of its flagship asset, the Pressure Oxidation (POX) Hub at Pokrovskiy, which enables the processing of the Company's abundant refractory reserves and resources.
Petropavlovsk is committed to implementing international best practices across all areas of sustainable development and is one of the region's largest employers and contributors to the local economy.
Contact:
Tel: +44 (0) 20 7201 8900
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