Coup at Petropavlovsk sees new chief executive appointed as gold price surges
The Russian gold magnate whose shareholder bloc seized control of one of London's biggest gold mining companies, Petropavlovsk, today saw his preferred new board take shape with the appointment of a new chief executive.
Petropavlovsk was named after its original founders Peter
(Petro in Russian) Hambro and Paul (Pavel) Maslovskiy in 1994.
However, they were recently ousted in a coup by a new
Russian investor who took over a 22% chunk of the company's shares and,
alongside another Russian shareholder, Everest Alliance, won a vote to put in
their own management.
Prior to their seizing control, Petropavlovsk claimed the
two Russian entities, controlled by Konstantin Strukov and Nikolai Lustiger
respectively, were improperly working in concert - a claim they denied.
Today, the new power centre's preferred board members
appointed a new interim CEO who is a front-runner to get the job permanently.
He is an economics and law graduate from a Russian university in a city called
Tyumen called Maksim Mescheriakov. The new board said had been working in
mining for 17 years.
Petropavlovsk has had an unstable power structure for years
due to a 22% bloc of shares which gets habitually passed from one wealthy
oligarch to another - currently Strukov's UGC business.
This time it had potentially been different due to the
arrival of a western shareholder called Prosperity which has built up a 20%
stake. While Prosperity opposed the Russian duo, it did not succeed in winning
over enough shareholders to win the tussle. Prosperity said the combined size
of Everest and UGC had enabled them to "overwhelm the ballot box".
The board also today appointed James W Cameron Jr, a
non-executive director since 2018, as chairman and bumped up NED Charlotte
Philipps to the role of senior independent director.
The ongoing boardroom battle has meant the company's shares
have traded at a discount to other gold stocks at a time of soaring prices of
the yellow metal.
Cameron said: "Our next step is to provide a robust and
transparent governance structure that will command the trust and support of all
stakeholders."
This would include engaging with the company's "largest
shareholders and institutional investors" to understand their views and
set up "effective corporate governance in future". The board intends
to hire Citigroup and UBS to help in that.
Some investors suspect Strukov's main purpose from the
outset has been to put gold from his other mining operations through
Petropavlovsk's new, state of the art refining plant known as a pressure
oxidation hub. The company has invested $400 million getting the plant up and
running.
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