21st Jun 2019 08:59
(Correcting the offer value stated in the headline to USD125 million.)
(Alliance News) - Petropavlovsk PLC placed USD125 million of convertible bonds, taking the option to increase its offer from USD100 million in response to a "significantly oversubscribed book of demand from a range of investors", the Russian gold miner said Thursday.
At the same time, Petropavlovsk bought back most of an existing set of bonds.
The new convertible bonds due in 2024 were sold with a coupon of 8.25%. Each bond will have a principal amount of USD200,000.
The bonds can be converted into Petropavlovsk shares at an initial exchange price of USD0.1350, a premium of 22.5% on the stock's closing price on Wednesday.
Petropavlovsk shares were up 0.7% on Friday morning at 9.36 pence each, about USD0.1189.
Petropavlovsk had said on Wednesday when announcing the bond offer that it will use the proceeds from the bond issue to build a new flotation facility at the Pioneer mine, one of Russia's largest gold mines, located in Amur Oblast. This is expected to cost USD25 million to USD30 million, and the company hopes to begin commissioning in the last quarter of 2020.
The facility at Pioneer will produce refractory gold concentrate for processing into gold dore at the newly-built pressure oxidation hub at the old Pokrovskiy mine.
Gazprombank, JP Morgan, Renaissance Capital and VTB Capital were joint bookrunners on the bond issue.
In a concurrent buyback, Petropavlovsk offered USD1,080 per USD1,000 of existing USD100 million 9.00% convertible bonds due in 2020. It said Thursday it received interest for this for USD78 million in principal, meaning 78% of the total and accepted all of these bonds for repurchase.
"I am pleased to report that our new convertible bond offering has been met with strong interest by the market, resulting in a significantly oversubscribed book of demand from a range of investors, which I believe highlights the attractiveness of the Petropavlovsk investment case," said Chief Executive Officer Pavel Maslovskiy.
"The new USD125 million convertible bond enables Petropavlovsk to maintain an optimal capital structure by refinancing the existing short-term USD100m convertible bond with a coupon of 9%, using a long-dated instrument and at a lower cost."
Related Shares:
POG.L