Uzhuralzoloto – aiming to succeed



UGC JSC is against the sale by Petropavlovsk PLC of a share in IRC Limited

In March 2020, Petropavlovsk PLC (“Petropavlovsk”) in which JSC Uzhuralzoloto Group of Companies (“UGC”) holds a 29.19% voting interest, entered into an agreement with Stocken Board AG (“Stocken”), a Liechtenstein-incorporated investment company, which set out the terms on which Petropavlovsk would sell to Stocken a 29.9% shareholding in IRC Limited, the only Russian iron ore company in the Russian Far East, for U.S.$ 10 million, subject to certain conditions precedent being met (the “Proposed Transaction”). In May 2021, the Proposed Transaction had become binding for completion.

In the press releases dated 24 August 2021 and 23 September 2021 UGC announced its position that the Proposed Transaction is against the business interests of Petropavlovsk. This transaction was entered into in different economic conditions at the initiative of P.A. Maslovsky, the then CEO of Petropavlovsk. In particular, the U.S.$ 10 million price under the Proposed Transaction is materially below the current market value of 29.9% shares of IRC Limited that is c. U.S.$65 million (according to the Hong Kong Stock Exchange).

Further, as part of the consideration under the Proposed Transaction Petropavlovsk would be released from c. U.S.$200 million guarantees granted to JSC GPB Bank (“GPB”) in relation to the facility agreements entered into between Kimkano-Sutarsky GOK LLC (a subsidiary of IRC Limited) and GPB in December 2018. At the same time, according to the report of IRC Limited dated 28 October 2021 (, the net debt of IRC Limited to GPB does not exceed U.S.$ 60 million. Therefore, the early release of Petropavlovsk from its guarantees to GPB cannot be deemed an adequate consideration for the shares in IRC Limited.

On 22 November 2021, UGC requested the Board of Directors of Petropavlovsk to postpone completion of the Proposed Transaction until this and other related matters are considered at the general shareholders’ meeting of Petropavlovsk and indicated that it is ready to protect its position and interests of shareholders of Petropavlovsk by all legal means. UGC urges the Board of Directors of Petropavlovsk to convene Extraordinary General Meeting of Shareholders to consider whether it is necessary to complete the Proposed Transaction and also calls upon the shareholders of Petropavlovsk to support this request by sending their respective instructions to the Board of Directors of Petropavlovsk.