Petropavlovsk could pay UGC cash instead of converting bonds, Prosperity would prefer that
MOSCOW. July 22 (Interfax) - Prosperity Capital Management, the second biggest shareholder on gold miner Petropavlovsk with a stake of around 14%, would prefer it if Uzhuralzoloto (UGC), the biggest shareholder which wants to convert Petropavlovsk into shares, were to receive cash instead.
"Right now it is very hard for Petropavlovsk to raise the money to pay cash, because the board and management are in limbo. But we would be glad if in the situation that has emerged the company were to take up that opportunity. Otherwise the group of shareholders looking to gain control of Petropavlovsk would strengthen their foothold," Alexander Branis, the director of Prosperity Capital Management, told Interfax.
It emerged on Monday that UGC had decided to convert Petropavlovsk bonds maturing in 2024 and worth $28.4 million into shares. That would boost UGC's stake in Petropavlovsk from 22.35% to 26.99%. Petropavlovsk has the opportunity to pay UGC the market price for the shares instead of issuing new shares. However UGC said it "expects" Petropavlovsk will not exercise the cash option.