25th Mar 2022 10:32
(Alliance News) - Petropavlovsk PLC on Friday noted the recent inclusion of Gazprombank on the UK sanctions list, a Russian bank with which it has "substantial commercial and financial relationships".
The UK added Gazprombank to its sanctions list on Thursday in response to Russia's ongoing invasion of Ukraine.
Petropavlovsk warned it has a USD200 million term loan and a USD86.7 million revolving credit facility with Gazprombank.
"It is a condition of these facilities and the term loan that Gazprombank acts as an off-taker of 100% of the group's gold production," the Petropavlovsk explained.
Sanctions and asset freezes imposed on Gazprombank currently prevent Petropavlovsk from making further sales of gold to Gazprombank.
"Restrictions on purchasing and selling gold in Russia may make it challenging to find an alternative purchaser for the group's gold output," Petropavlovsk warned.
"The company is urgently considering with its advisers the implications for the group's activities and financing arrangements resulting from GPB being designated for the purposes of an asset freeze. A further announcement will be made in due course. Petropavlovsk reconfirms that none of the companies in the group has to date been named in the sanctions against Russia announced by the United Kingdom, United States, European Union, and other nations."
Petropavlovsk also noted it has an interest payment of USD560,000 due on Friday under the Gazprombank term loan, but is currently prohibited from making this payment due to sanctions.
Petropavlovsk shares were down 14% at 1.54 pence in London Friday morning, giving the firm a market capitalisation of about GBP70 million.
Index operator FTSE Russell last Monday said Petropavlovsk was among a number of Russia-linked stocks deposed from FTSE Russell indices. Petropavlovsk had already been due to drop out of the FTSE 250 index, following an index review which came into effect earlier this week.
Its shares have slumped roughly 90% since mid-February.
By Eric Cunha; [email protected] and Lucy Heming; [email protected]
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