Sapinda, a key shareholder in gold miner Petropavlovsk, says it will vote in favour of the company's controversial refinancing plans at an EGM this Thursday, but only if certain of its own proposals are accepted by its management and bondholders.
Petropavlovskmanagement's recapitalisation plans comprises a new $100m convertible bond and a 5p-per-share, 157-for-ten rights issue. The latter, which is to be voted at an EGM this Thursday, would raise £155m ($235m) to help slash the company's $920m net debt to around $700m.
The company has an unusually high number of retail shareholders an estimated 12,000, or 33% of the shareholder register. Sapinda, an Amsterdam-registered investment fund, is the largest single shareholder with a 9.6% stake. It has joined forces with other disgruntled shareholders to oppose the company's proposals. With a combined holding of more than 13%, these dissenting shareholders have been threatening to vote against the company's plans because they are "too biased in favour of bondholders over shareholders".
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Sapinda had been pushing an alternative recapitalisation proposal. But in a statement today, it says that after talks with Petropavlovskmanagement it now proposes a "compromise refinancing proposal that would still raise new money on better terms for shareholders than the company's current proposal, and provide fresh cash for the business".
Sapinda says it will vote in favour of the company's refinancing proposals only if all parties (company management and 75% of bondholders) agree to a follow-on private placement with Sapinda and other current shareholders of $100m at 3p per share. It also wants the parties to allow for the option to take the issue up to $125m if necessary to meet demand from current shareholders.
All current shareholders will be able to participate in the fundraising scheme. Sapinda wants to purchase a minimum of $50m itself but it undertakes to sell down its stake after the placing if it exceeds 25% "as necessary to comply with Russian Strategic Industries Law". Unsubscribed shares after the placing should be made available to bondholders, it says.
The investment fund expects Petropavlovsk management to recommend its proposals to bondholders. It also wants the right to appoint two directors to the board of the company though it stresses its continuing support for the company's chief executive, Pavel Maslovskiy.
Sapinda says its plan would mean a minimum of $100m being injected into the company. It insists the proposal would be "beneficial for all current shareholders", adding it will also create "valuable tradeable rights" for those who do not want to exercise their option to buy shares in the right issue.
While saying it will vote in favour of the Petropavlovsk management's proposals at this Thursday EGM if its own conditions are met, Sapinda believes that, realistically, time is now too tight to agree everything before Thursday: it expects the company board "to behave rationally and postpone the [Thursday] vote to allow all parties to agree a way forward that is beneficial to all stakeholders".
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