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Petropavlovsk PLC on Friday announced it is defaulting on loan repayments that are owed to Moscow-based Gazprombank, which is on the UK sanctions list following Russia's invasion of Ukraine.
On April 20, the bank demanded the immediate repayment of $201.0 million under a committed term facility and repayment of UD87.1 million due under Petropavlovsk's Russian subsidiaries' revolving credit facilities by Tuesday this week.
Two weeks ago, Petropavlovsk said it was unable to make the interest payments to Gazprombank, due to the sanctions imposed on the Russian lender.
‘One or more events of default under the conditions have occurred,’ Petropavlovsk said on Friday. ‘At this time, no acceleration of the guaranteed notes or convertible bonds has occurred,’ the London-based gold mining company with operations in Russia added.
Petropavlovsk has previously noted it has limited cash reserves outside Russia, and legal restrictions in Russia limit its ability to transfer cash out of the country. What's more, as a condition of the loans, Gazprombank acts as the buyer of all of Petropavlovsk's gold production.
In its quarterly production update on April 22, it said it is exploring options for the sale of its gold, including to other potential buyers, and has applied for a new licence to export gold.
Petropavlovsk shares were 5.3% lower at 2.18 pence each in London on Friday afternoon.
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