19th Oct 2018 17:38
LONDON (Alliance News) - Petropavlovsk PLC on Friday said IRC Ltd will be unable to repay a bridge loan provided by the gold miner on its due date.
Petropavlovsk holds a 31% stake in IRC and provided the bridging loan to repay IRC's obligations.
In September, it was announced that iron ore producer IRC would be refinancing its existing USD204 million loan with Industrial & Commercial Bank of China Ltd through a new deal with an unnamed Russian bank. The refinancing would then be used both to pay back the Chinese bank and the Petropavlovsk loan.
Petropavlovsk said that, as refinancing talks are still ongoing, IRC will not be in a position to make repayments, but Petropavlovsk will take no action to demand payment.
This lack of action is dependent on IRC repaying the loan in full by December 20, paying all accrued interest on Saturday and on a monthly basis thereafter, and the payment by IRC to Petropavlovsk of a fee equivalent to USD200,000 in payment for the waiver of lender's rights.
Shares in Petropavlovsk closed up 1.1% at 6.35 pence each on Friday.
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