MOSCOW, Aug 25 (PRIME) -- Russian gold producer Uzhuralzoloto Group of Companies (UGC), the largest shareholder of another gold producer Petropavlovsk Plc, has stood against selling a stake of Petropavlovsk in iron mining subsidiary IRC to investment company Stocken Board for U.S. $10 million, UGC said in a statement late on Tuesday.
Petropavlovsk signed a preliminary agreement to sell a 29.9% stake in IRC Ltd. to Stocken Board AG for $10 million in March 2020. The deal was subject to approval by Gazprombank, a creditor of the company, and the bank approved the sale in May 2021, but the capitalization of IRC amounted to around $100 million then.
“UGC announces that it does not consider that completion of the proposed transaction is consistent with Petropavlovsk’s business interests and that Petropavlovsk should therefore seek the approval of the proposed transaction by the bond holders,” the statement read.
Taking into account the logistical benefits, location of production assets, and an outlook on the iron ore market, IRC has a strong potential for growth even above the market worth of $100 million at the time when the agreement became binding. , the company said.
UGC wants the board of directors of Petropavlovsk, the trustee of holders of the company’s bonds, and the bond holders to convene a meeting to discuss whether the deal is consistent with interests of the gold producer and whether it should be completed.
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