Petropavlovsk requests to terminate trading of shares on Moscow Exchange after appointment of administrators

MOSCOW. July 19 (Interfax) - A court in the United Kingdom has made the decision to appoint Allister Manson, Trevor Binyon, and Jo Rolls of Opus Business Advisory Group external managers of gold miner Petropavlovsk , the company said.

This means the beginning of insolvency proceedings. Petropavlovsk's existing board of directors has ceased to have decision-making powers with immediate effect, and these powers have been transferred to the administrators, who are responsible for the day-to-day running of the company, Petropavlovsk said.

Immediately following the decision, Petropavlovsk filed requests to cancel its listing of shares and convertible bonds on the London Stock Exchange and terminate trading of its shares on the Moscow Exchange .

The imposition of UK sanctions on Gazprombank , which was until recently Petropavlovsk's largest creditor and gold buyer, made it difficult for the company to sell its gold and service its debt, and Petropavlovsk began to miss interest payments. In April, Gazprombank demanded the early repayment of $201 million with interest on a loan to the parent company and $87.1 million on credit lines to subsidiaries. Soon after this, the bank transferred the claim rights against the parent company to an affiliate of Ural Mining and Metallurgical Company (UMMC) and those against the subsidiaries to a firm called Nordik, but this did not free Petropavlovsk from having to pay off the debt early.

Petropavlovsk cannot currently pay off the debt to UMMC and for a number of reasons the company's board believed refinancing was unlikely, the miner said.

Petropavlovsk engaged consultants to study options for getting the company out of its predicament, including the possible sale of its stakes in production divisions. The company said it was holding negotiations with two potential buyers.

Petropavlovsk, which mines gold deposits in Amur Region, is one of Russia's top five gold producers. Konstantin Strukov remains the company's largest shareholder with about 29%.