Petropavlovsk board seeks mandate to raise borrowing limit to $1.5 bln
MOSCOW. May 3 (Interfax) - Directors at gold miner Petropavlovsk plc will ask shareholders at their AGM to sanction an increase in the borrowing limit to $1.5 billion from $700 million, the company says in materials for the AGM.
"The Directors believe that it would be prudent to request such a sanction by ordinary resolution to vary this restriction. The existing limit is no longer considered appropriate given the Group's development and expansion as well as its anticipated expenditure," the company said.
As at December 31, 2010, the Group's total borrowings were $492.1 million, compared with $95.5 million at the end of 2009.
"In addition to the normal level of borrowing, the maximum amount would need to allow sufficient flexibility to provide normal liquidity headroom," the company said.
It also said permission would be sought to issue new shares representing up to 66% of current issued share capital and to buy back up to 5%.
Directors would have authority to allot shares up to an aggregate nominal amount of a maximum of 619,938 pounds sterling, or approximately 33% of the current issued ordinary share capital; and an additional number of ordinary shares up to an aggregate nominal amount of a maximum of 619,938, pounds, or a further 33% of the current issued ordinary share capital, but only for the purposes of a rights issue in which the new shares are offered to existing shareholders in proportion to their existing shareholdings.
As a result, the directors could allot shares representing up to two-thirds of the current issued share capital pursuant to a rights issue. However, if the Directors do conduct a rights issue and the number of shares issued exceeds one-third of the issued share capital and the monetary proceeds from the rights issue exceed one-third of the Company's pre-issue market capitalisation, then, in accordance with the ABI's guidance, the Directors will all offer themselves for re-election at the Annual General Meeting following the decision to make the rights issue.
"The Directors will continue to seek to renew these authorities at each AGM, in accordance with current best practice. The Directors have no current plans to allot shares, except in connection with the Company's employee share schemes," Petropavlovsk said.
In the event of a share issue, the directors are also requesting the right to sell outside shareholders shares, without a rights offer, with a nominal value of up to 93,930 pounds or 5% of current issued share capital.
In addition, the board is asking for a mandate to buy up to 9,393,000 ordinary shares or 5% of issued capital on the LSE with the opportunity to hold these shares in treasury or cancel them.
"The Board has no present intention of exercising this power and the granting of this authority should not be taken to imply that any Ordinary Shares will be purchased. It is the intention of the Directors only to exercise such authority if satisfied that to do so would be in the best interests of the Company," the statement said.
Petropavlovsk plc was set up through a merger between gold producer Peter Hambro Mining plc and minerals company Aricom plc in April 2009. The merger created one of the leading mining companies in Russia's Far East. Petropavlovsk spun the iron ore division off in the autumn of 2010.