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I thought technically he never actually sold it. I was shocked, dubious and then cynical when the sale took place and wondering what strukov was up to. it was clearly evident to me that the 27m he would have got was peanuts to him and the fact he would have crystalized a substantial 200m loss didn't make any sense. lets be fair most pi's either ignored it or it went over their heads; but he was definitely up to no good
Did strukov sell his stake to ‘book’ the loss - to offset against a presumably v large tax bill (as was mentioned) then buy it back so he didn’t lose his stake ?
Had said on March 25th for a fixed price ........ then changed their minds to a negotiated price from April 8th
Russia's central bank said on Thursday that due to a "significant change in market conditions" it would buy gold from commercial banks at a negotiated price from April 8.
On March 25, the bank had said it would buy gold at a fixed price of 5,000 rubles a gram until June 30.
Have to agree commonstock ....
Russia's Central Bank Says It Will Stop Buying Gold at a Fixed Price. April 7, 2022, at 11:40 a.m. (Reuters) - Russia's central bank said on Thursday that due to a "significant change in market conditions" it would buy gold from commercial banks at a negotiated price from April 8.7 Apr 2022
Ah - just done quick Google search and Russian Central Bank are no longer doing this - https://news.cgtn.com/news/2022-04-08/Russia-s-central-bank-says-it-will-stop-buying-gold-at-a-fixed-price-193UijGzUqI/index.html unless I have missed the story that it has restarted.
Strike - you say “they make more money in dollars” but at the moment if the Central Bank are buying at 5000 rubles per gram, this is equivalent to $2,500 per Troy ounce.
This tallies with what JM is saying - it is not an issue of servicing operations by the subsidiaries as I assume most of the cash costs of operations are paid in rubles - it is getting that in dollars / pounds to service the debt at the group / plc level.
Very good question: The story that strukov sold to Region ban ks is a very curious one
Strike, all good points
Worth noting Strukov’s stake cost him $250mn (was reported at time) it’s now worth $20mn. Hardly small change but does he.care about this stake now ?
First of all, if lenders wanted to seize the POG assets and make POG go bankrupt then it would have happened already. It is now 3 months since the war started and the news we have from POG is that -
1) debt transferred from GPB to Nordic/UMMC
2) Waivers received from GBP
3) New buyer found
4) new Export license requested
Now the alarming RNS this week was due to not paying the coupon amount due on 14th May. Again this could be due to sanctions. Lenders can see the gold being produced by POG. If GPB tries to seize the asset then they may not make lot of money in rubles by selling gold. They make more money in dollars so they need POG to survive so that POG can get the new export license, which enables gold sales in dollars.
Now Strukhov who has 29% stake will also benefit if POG remains listed otherwise his whole stake becomes worthless.
So IMO POG will survive and will continue to list. Only thing is SP may not move higher to double digits unless big funds buy in but we small PIs managed to move the SP to 5p so I guess it is worth a punt at these prices if you do not want to miss another 100% rise for the third time!
I agree
My logic with this was…
1. If money was actually paid (full value)
Both new debt holders are confident of getting their money back…. ie
Confident all parties are working to keep pog a going concern
Or
By seizure of assets (maybe they become the 1st teir debtor above bond holders)?
…..If they paid full value means administration/ firesale /bankruptcy is definitely off the table as it would be unlikely 2nd tier debtors are fully reimbursed
2. If pence in pound…
They think they can obtain a stake in pog (debt / equity swap)
Or
They think pogs situation is dodgy and it’s a punt
If gpb gifted the debt
Gpb are friendly and all parties are working together to keep pog as going concern
Or
Gpb want to avoid publicity if the dirty deed is done I.e seizure - doubt they care about this
Or
Gpb want pog cheaply (debt/equity swap)
Any body got other thoughts?
The worrying thing is that 1 seems more likely.
I was trying to get an answer from IR as to whether ummc / Nordic had paid full value for the pog debt or for pence in the pound or just given a guarantee to GPB - I thought this would indicate whether they thought they the debt was serviceable / good value. Or whether it indicated it was a high risk punt by them.
Giving us an idea of how safe our investment my be…
emailed to JM
1. Can you confirm if either UMMC or Nordic LLC have purchased petropavlovsk's term loan or RCF from GPB for a cash value / or guarantee, and if so for what value / or guarantee?
If not, can you explain their relationship?
Reply
I can confirm that UMMC-Invest JSC has been assigned the US$201m term loan by GPB, as per our announcement on 20.04 (https://petropavlovskplc.com/wp-content/uploads/2022/04/20220420-GPB-Update.pdf). UMMC is the Urals Mining and Metallurgical Company, a large Russian conglomerate.
I can also confirm that Nordic LLC was assigned the $US87m RCFs, as per our announcement earlier this week (https://petropavlovskplc.com/wp-content/uploads/2022/05/20220516-DebtUpdate.pdf). Nordic is a Moscow-based fin. company.
We are not privy to any financial arrangements between GPB and UMMC-Invest or Nordic. You'll have to ask them.
Conclusion
Very vague and just reiterated the stated line
So either,
1 They genuinely don’t know
2 Unwilling to disclose