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Petropavlovsk board ousted in AGM coup

Tue 30 June 2020 11:26 | A A A

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(Sharecast News) - Petropavlovsk has accused its biggest shareholder of seizing control of the Russian gold miner without paying a takeover premium after the company's board was voted out at its annual general meeting.

The company's board has alleged UGC acted as a concert party with other investors to take effective control of the company against the wishes and interests of the majority of shareholders.

Pavel Maslovskiy, chief executive, Danila Kotlyarov, chief financial officer, and Fiona Paulus, chair-designate, were voted out along with four non-executive directors at the AGM.

Maslovskiy will stay with the company as chief operating officer but will be replaced as CEO by Alya Samokhvalova. Peter Hambro, who was ousted from the board in 2017 but returned to the company in 2018, will be interim chairman with three temporary non-executives, UGC's representative and two other non-executives.

The board announced the changes before the AGM based on proxy voting. It said the results were engineered by UGC, which holds 22.4% of the shares, and an adviser to two other investors, Everest and Slevin, which hold almost 17% between them. Fortiana Holdings, which owns 4.6%, also voted against the board.

The board said the result went against the company's interests and the wishes of the independent majority of shareholders. Petropavlovsk shares fell 14.4% to 26.55p at 12:31 BST.

UGC's director Maxim Kharin voted with other directors to unanimously approve the re-election of the board at a meeting on 24 May, the board said. This gave the board and other shareholders the misleading impression that UGC would vote for the existing board, leading to a diminished total turnout of 73% and allowing the four investors' to prevail, the board said.

"Had shareholders been aware that, in the board's opinion, UGC and its partners intended to use their minority 39.08% shareholding to gain effective control of the company, and to do so without paying any control premium, the board considers it highly likely that they would have voted to prevent it," the board said.

The board alleged that Nikolai Lustiger, who represents Everest and Slevin, was in touch with Konstantin Strukov of UGC and had at times sought to act jointly with UGC to influence the company.

"The board has therefore asked the Takeover Panel to investigate whether a concert party has acted in breach of Rule 9 of the Takeover Code," the board said.

The board said it would appoint Samokhvalova as CEO and the four temporary directors until a further general meeting is able to appoint a suitable board. It requested the interim board to call the meeting within three months so all shareholders can vote with full information.

"Overall, we find this a highly surprising turn of events," Canaccord Genuity analyst Sam Catalano said: "We believe the board has acted swiftly, decisively and in the interests of the majority (by number) of shareholders by installing individuals with good knowledge of the business."

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