Petropavlovsk (POG) says it has found a buyer for most of its stake in Russian iron ore miner IRC, which is chaired by co-founder Peter Hambro.
IRC, which is listed in Hong Kong, has long been a millstone around Petropavlovsk’s neck. The gold miner has lent the miner cash and provided a guarantee on its debts as IRC has built an iron ore operation in Russia’s far east. The purported buyer, a Liechtenstein-registered company called Stocken, will pay $10m (£8m) for 29.9 per cent of IRC. Petropavlovsk owns 31.1 per cent. The gold miner did not provide any details for Stocken, which was registered last year as a “tokenisation” company. A spokesman could not provide the identity of the possible buyer. At current market prices, 29.9 per cent of IRC is worth around $18m.
IRC had $220m net debt at the end of 2019. Petropavlovsk would pass on its role as guarantor of these loans to the buyer if the deal goes through. However, this will require Gazprombank to sign off on the deal. Gazprombank could easily veto the arrangement in the next three months, and Petropavlovsk can pull out if the mysterious buyer won’t take on the loan guarantee. If the deal does go through, Stocken has plenty of time to find the money, with the payment deadline the end of 2021.
