The London High Court has decided to appoint Alistair Manson, Trevor Binion and Joe Rolls of Opus Restructurin as the outside managers of gold miner Petropavlovsk, the company said.

This means the beginning of the insolvency procedure. The board of directors of Petropavlovsk has lost decision-making powers, and administrators will be responsible for the day-to-day operation of the company.

Following the appointment of managers, Petropavlovsk filed an application to cancel the listing of the company’s shares and convertible bonds on the LSE and stop trading in shares on the Moscow Exchange.

The inclusion of Gazprombank, which was the main creditor and buyer of Petropavlovsk, on the UK sanctions list made it difficult for the company to sell gold and service its debt. The gold miner started missing interest payments. In April, Gazprombank demanded early repayment of $201 mn from Petropavlovsk, including interest on the parent company’s loan, and $87.1 mn on credit lines to subsidiaries. And shortly after that, he transferred the rights of claim under the obligation of the parent company to a company associated with the UMMC, and „daughters” – to the company „Nordic”. However, this did not free the gold miner from the early repayment of obligations.

At the moment, Petropavlovsk is unable to repay UMMC, and for a number of reasons, the board of directors considers the possibility of refinancing unlikely, the gold miner said.

Petropavlovsk has engaged consultants to analyze options for a way out of the current situation, including a possible sale of the company’s shares in manufacturing enterprises. According to the gold miner, he is negotiating with two potential buyers.

Petropavlovsk is mining gold deposits in the Amur Region and is one of the top 5 Russian gold miners. Konstantin Strukov remains the largest shareholder of Petropavlovsk with a share of about 29%.