26th Feb 2015 16:39
LONDON (Alliance News) - Petropavlovsk PLC shares soared after it said its shareholders have voted in favour of its refinancing programme, which includes a rights issue and bond exchange offer at a general meeting.
Sapinda Holdings BV, which represents a group of shareholders with a collective 10.9% stake in the company, responded with its own statement that said it backs Chairman Peter Hambro and Chief Executive Pavel Maslovskiy.
Petropavlovsk shares closed up 11% to 15.00 pence per share Thursday.
On February 2, Petropavlovsk said it had launched a refinancing programme, including a GBP155.1 million rights issue of new shares and a new five-year USD100 million convertible bond, intended to "secure the group's immediate future" and allow it to increase production in 2015.
On Thursday, the company said shareholders have voted in favour of its 157-for-10 rights issue of up to 3.10 billion shares at 5.0 pence per new share and its proposed bond exchange offer.
During February, Sapinda argued the proposal unfairly favoured bondholders at the expense of shareholders, diluting them by 94% and issuing the new shares at a price of just 5 pence, 80% below Petropavlovsk's share price prior to the bondholder proposal.
Sapinda added that the proposed bondholder proposal would still leave Petropavlovsk with USD700 million in debt, and offered to inject a "substantial amount of money into the company as part of an alternative recapitalisation that is fairer for all shareholders."
Petropavlovsk had welcomed Sapinda's offer, but said their proposals were flawed and urged shareholders to support the company's proposed refinancing programme to ensure Petropavlovsk did not enter insolvency.
Sapinda had responded by submitting its own refinancing proposal, which were a "compromise" it was willing to accept in order to support the company's refinancing proposals.
It is not clear if Sapinda voted for the resolutions at the general meeting, but its statement expressed backing for the chairman and chief executive. The vote in favour of the rights issue and convertible bond was 88.6% of the voting rights.
It remains unclear whether any of Sapinda's suggestions will be taken forward by the company.
Sapinda said it would vote in favour of Petropavlovsk's proposals if all parties commit to a follow-on private placement with Sapinda and other current shareholders of USD100 million at 3.0 pence per share and to allow the option to take the issue of up to USD125 million if necessary to meet the demand from current shareholders, with unsubscribed shares being made available to bondholders.
By Joshua Warner; [email protected]; @JoshAlliance
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