21st Jun 2018 14:36
LONDON (Alliance News) - Fincraft Holdings, the largest shareholder in Petropavlovsk PLC, said Thursday it "strongly encourages" other shareholders to support board change requisitions put forward by CABS Platform Ltd and Slevin Ltd.
Kenes Rakishev, the owner of Fincraft which holds a 22% stake in the Russian miner, said in a letter to fellow shareholders he "remains concerned under the current board Petropavlovsk's position is becoming increasingly precarious".
Rakishev continued: "In our view, Petropavlovsk is an undervalued business and, with the right leadership, has a bright future ahead of it."
Rakishev supports the reinstatement of former Chief Executive Pavel Maslovskiy, who supervised the design and implementation of the POX hub, the miner's pressure oxidisation processing hub located near the Pokrovskiy mine in Russia.
The shareholder said the current board "has refused every opportunity to open a dialogue with Fincraft".
Rakishev had previously said he would direct his investment vehicle Fincraft to back the proposal to oust the current board and reinstate members from the previous management.
Earlier in May, CABS and Slevin, which have a combined 9.1% stake, issued a requisition notice to remove all Petropavlovsk directors and replace them with Maslovskiy, Roderic Lyne, and Robert Jenkins, all of which are former directors of the company. Lyne is a former UK ambassador to Russia.
Since the issue of the first requisition letter, there has been much back-and-forth between Petropavlovsk and what it has called "mystery" shareholders, with the miner trying to identify the people behind CABS and Slevin.
Both CABS and Slevin have sent letters to Petropavlovsk naming some individuals behind the companies, but the miner does not believe them to be the ultimate owners.
Petropavlovsk Chairman Ian Ashby said there is "simply no way of knowing" if the motives behind CABS and Slevin's requisition proposal are to acquire control of the company by stealth at a discounted valuation or if there are other "nefarious" objectives.
Rakishev said: "The accusation Fincraft is acting in concert with the requisitioning shareholders, is a diversionary tactic to block real discussion about who is best to lead Petropavlovsk."
Petropavlovsk's second largest shareholder, Sothic Capital Management UK LLP, said last Monday it was "strongly against" replacing the company's board.
Rakishev said he considers Sothic's statement to be "insincere at best, and deliberately misleading at worst" as Sothic can sell its holding "at any time".
On Monday, proxy advisory firms Institutional Shareholder Services and Glass Lewis & Co recommended shareholders to vote against the requisition and support the current board.
Petropavlovsk shares were trading down 2.1% at 8.17 pence each.
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