Sanctions-hit Gazprombank demands repayment of Petropavlovsk miner’s loan

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  • Lender seeks immediate repayment of $201 million term loan
  • Miner advised to return $87m revolving credit
  • Petropavlovsk shares fall 28%

April 20 (Reuters) – Sanctioned Russian lender Gazprombank has asked Petropavlovsk (POG.L) to immediately repay a term loan worth $201 million, the gold miner said on Wednesday, highlighting the difficulties caused by Western restrictions on Russian businesses.

London-listed Petropavlovsk said last month that sanctions imposed after Russia invaded Ukraine meant it was barred from making repayment.

This puts the miner, who is not subject to sanctions himself, in a difficult position, as he has extensive commercial and financial relations with Gazprombank, which also acts as a buyer of the entire production of gold of the group.

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Petropavlovsk shares fell 28% to a record low of 1.53 pence in morning trading.

The stock has fallen about 91% since mid-February when Russian forces began massing on the Ukrainian border. Russia calls its actions against its neighbor a “special military operation”.

Hundreds of companies have suspended operations in Russia since the start of the war, or pulled out of the country altogether, due to complications in doing business there.

Petropavlovsk said last month restrictions on buying and selling gold in Russia could make it difficult to find an alternative buyer for its gold production.

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

Gazprombank did not immediately respond to a request for comment.

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

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Reporting by Aby Jose Koilparambil in Bengaluru Editing by Rashmi Aich and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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