Petropavlovsk to sell part of stake in Omchak

Petropavlovsk, a FTSE 250 mining group, has said that on Tuesday it signed a share purchase agreement for the transfer of 65 per cent of its issued shares in Omchak to Susumanzoloto in four tranches.

The total consideration for the sale is $21.65m.

The approval of the Federal Antimonopoly Service of Russia has already been obtained for the transaction. Following completion of the transaction, Petropavlovsk will remain a 25% shareholder in Omchak.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

Chairman Peter Hambro said: "The group has adopted a strategy to focus on its core projects, thereby optimising its capital expenditure requirements and deleveraging its balance sheet, we are pleased to have confirmed the sale of these non-core assets."

The transaction will result in an accounting loss of approximately $30m to be recognised in the results for the year ending December 31st 2012, reversing the fair value gain of approximately $26m which arose in 2010.

The share price rose 2.08% to 339p by 08:39.

NR