foreign banks

Sanctions-hit Gazprombank demands loan repayment from miner Petropavlovsk

Reuters
Sanctions-hit Gazprombank demands loan repayment from miner Petropavlovsk

GOLD. Employees process ingots of 99.99% pure gold at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia, November 22, 2018.

Reuters

London-listed Petropavlovsk earlier said the sanctions imposed after Russia's invasion of Ukraine meant it was prohibited from making the repayment

Sanctions-hit Russian lender Gazprombank has called on Petropavlovsk to immediately repay a term loan worth $201 million, the gold miner said on Wednesday, April 20, highlighting the difficulties caused by Western restrictions on Russian firms.

London-listed Petropavlovsk said last month the sanctions imposed after Russia’s invasion of Ukraine meant it was prohibited from making the repayment.

That puts the miner, which has not itself been targeted by sanctions, in a difficult position, as it has an extensive commercial and financial relationship with Gazprombank, which also acts as an off-taker for the group’s entire gold output.

Petropavlovsk’s shares tumbled 28% to a record low of 1.53 pence in morning trade.

The stock has plunged about 91% since mid-February, when Russian forces started massing on Ukraine’s border. Russia calls its actions against its neighbor a “special military operation.”

Hundreds of companies have suspended operations in Russia since the war started, or withdrawn from the country completely, due to complications of doing business there.

Petropavlovsk said last month restrictions on buying and selling gold in Russia might make it challenging to find an alternative buyer for its gold output.

Petropavlovsk also said on Wednesday it had been asked by Gazprombank to return about $87.1 million due under other revolving credit facilities in less than a week by April 26, adding it was considering the implications of the notices.

Gazprombank did not immediately respond to a request for comment.

Petropavlovsk has also received a notice from Russia’s UMMC-INVEST that Gazprombank had assigned all its rights under the term loan to UMMC as the successor agent. It was not immediately clear how this would affect Petropavlovsk. – Rappler.com