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Whatever view you take, pog is massively undervalued. I actually don't object to the UGC move. Funny, when I first started investing in POG last December, I recall so much negativity on this board and the sub-text was fraud by management. Now you have the opportunity to investigate the transactions for the last 3 years and everyone is saying don't vote for it. That's nuts. I have for the sake of clarity and for the sake of credibility going forward.
But each to their own value system.
retiredbanker, sounds similar to what Dell did a few years ago. Well, I have high hope this will be plus £1 if POG is not taken over or sold cheap. I just get the feeling if it is sold cheap they will sell it for 50p a share.
RB
" UGC may attempt a reverse takeover of Petropavlovsk .... In a reverse takeover, a private company buys enough shares to control a publicly traded company. This type of merger enables the private company to become publicly-traded without resorting to an initial public offering."
Forgive me if I'm being dull but wouldn't that mean that Strukov would miss out on the millions he could raise in an IPO?
An article putting forward the UGC case :
(An impartial reader would probably have to agree with many of the observations - but DYOR)
UGC's motivation for voting against several directors on the Petropavlovsk board was to primarily ensure the independence of the board and its focus on the core business and operational efficiency, a UGC spokesman said July 29. Board composition changeover should help resolve the issues that have held Petropavlovsk back from achieving its potential, he said. Petropavlovsk has some valuable assets but has historically underperformed with regards to cash returns and cost control, according to UGC. UGC in 2019 generated $265 million operating cash flow versus Petropavlovsk's $95 million, the spokesman said, confirming UGC founder and CEO Konstantin Strukov's previous comments to Kommersant newspaper. Comparing his company to Petropavlovsk, Strukov had said that UGC has lower production costs, although the company works with very low gold grades in ore, and has larger gold reserves. "We have almost no debt load versus Petropavlovsk's $775 million debt including prepayments, and Petropavlovsk, being a public company, has never paid dividends in ten years," he said.
An Everest representative told S&P Global Platts that the alliance voted against certain Petropavlovsk board members as they were insufficiently focused on shareholder returns. The gold company had been underperforming as the board had been pursuing the wrong strategy, said Everest. The firm insisted that the management should be focused on making the company start paying dividends and taking it from FTSE 250 to FTSE 100 -- a share index of the 100 London Stock Exchange-listed companies with the highest market capitalization.
From the look of things, UGC may attempt a reverse takeover of Petropavlovsk, Artem Bagdasaryan at Moscow-based BCS Global Markets told Platts. In a reverse takeover, a private company buys enough shares to control a publicly traded company. This type of merger enables the private company to become publicly-traded without resorting to an initial public offering.
Likewise Lawrence, I'm considering the risks of staying in as I type.
Workingstiff: What's the value of Prosperity's bonds and what would they convert to in shares?
Don't know about anyone else but I'm getting nervous about the vote
mdunsire
Thanks for the response, but what I really wanted to know is whether Prosperity have already or intend to convert their bonds in time for next week's vote.
Who let UGC in?
Working stuff
I presume you are referring to me above.
I made this clear all along as did Prosperity.
There is a very real chance that UCG can get control and then shaft small shareholders like us. They and their collaborators have 40 percent of votes already after converting their bond share...that's why everyone on this board needs to vote like Prosperity recommended....in my earlier post....
In a war.....
Investors are the weapon...
Bonds are like sandbags...... Whereas...
Shares are ammunition.....
I personally think UCG are preparing for a sizable counteractive move until equal ground is gained...
Chats with prosperity??
Only if you think he/she was telling the truth?
Updownflat, What do you mean there was no other way these bondholders were going to convert. They could have quite simply, stayed invested in bonds, earning there 8.25% coupon on a quarterly basis, and converted at the same price, possibly, or probably, with a much higher price in 4 years.
If you had bonds with the same coupon and conversion option, would you ave converted ?? I know I wouldn't have if I had any, unless I had an ulterior motive. ??
I wonder what happened to the poster on here who said he/she was having chats with Prosperity? It would be interesting to hear their take on today's news.
working stiff, I do not know for sure, but I know its a very high proportion as UGC advised they were converting $28.4m then we don't know what Everest has. See below
Uzhuralzoloto Group of Companies ("UGC") today announces that it has acted to exercise its conversion rights for its holding of 8.25% convertible bonds due 2024 issued by Petropavlovsk 2010 Limited.
UGC has converted bonds of a principal amount of USD 28,400,000. UGC expects that the Company will not exercise the cash alternative election but will allow all shareholders to convert into shares and to be treated equally in accordance with the recent Court Order.
Mr Konstantin Strukov, President of UGC, stated
“UGC recognises the potential of Petropavlovsk, but we believe that one of the company's main issues is its large debt load. To confirm our commitment to the strategic development of Petropavlovsk, we have decided to convert the company’s bonds into shares. This was intended specifically to reduce the debt load and facilitate the adoption of a progressive dividend policy by Petropavlovsk in the interests of all shareholders, especially minority ones’.
‘UGC, as the largest shareholder of Petropavlovsk, regrets the actions undertaken by the former directors who were not re-elected at the Company's AGM, and believes that the purported temporary directors, even when combined with the directors duly elected by shareholders, do not create a Board that meets the independence criteria set out in the UK Corporate Governance Code.
We hope that the current forensic investigation initiated by another Petropavlovsk shareholder, if approved at the forthcoming general meeting, will lead to an objective assessment of all of the issues being examined. We remain ready to support and engage with the Management of the company in its development and anticipate productive engagement in ensuring a beneficial outcome to the Company’s current shareholder issues”
Rusty,
there was no other way that these convertible bondholders were going to convert. I want the same thing you do, an increasing share price, preferably with independence. I just don’t see it as black and white as you do. I recommend to all shareholders to vote "for" 1-6 and "against" 7-19. If prosperity is truly on the side of the shareholders they too will convert. If not then you are being used.
Rustybucket
"this has nothing to do with prosperity, It is Everest and UGC"
Do you know this to be the case? The RNS says "....on behalf of the Uzhuralzoloto Group of Companies, Renaissance Securities (Cyprus) Limited and OTHER HOLDERS*,...." *My capitals for emphasis. You may be right in that if Prosperity had converted I think the RNS would have mentioned it. But we don't actually know that the $20m over and above UGC's holding all belonged to Everest, or that all those newly converted shares are hostile to the old board, do we?
Updownflat, so you voted for the old board, UGC who are looking to replace them have just amassed a boat load of new shares and you think thats a good thing.
If UGC win the vote and then put there own interests at heart rather than smaller shareholders lets see how you think then.
If it wasn't for the fact that they are the instigators of the old board being ousted, I would have thought its a good thing because of the saving of interest etc, but if its then just to be paid back to UGC in the form of dividends or something worse then that is just taking money out of the company.
All this has done is bring more confusion. Just remember how the sp dropped when the old board were ousted and remember we haven't got an auditor at the moment.
Workingstiff,
the dilution was going to happen anyway, but UCG has just given away 4 years of interest and all sorts of dilution protection for nothing. This really makes a dividend possible. The only question I have is "Pavel running UCG ? " because the only reason we are in the mess is because he gave away the convertibles for nothing in the first place.
Rusty
for ye olde board'y , 3.4M shares. Net debt is also down by $50m. Really the other side now needs to convert and this company should start to fly.
UpDownFlat
"This is actually excellent news for equity shareholders."
Long term - perhaps. Short term it's an 11% share dilution. Under different circumstances I would have been pleased to see this happen. But as things are, it only adds to the uncertainty.
Updownflat, I don't know how you can make that statement without knowing UGC INTENTIONS. It has just given then extra voting power, you think thats a good thing ???
Which way did you say you had voted ??
And an annual $4.25M saving on interest payments from this portion.
Working stiff, this has nothing to do with prosperity, It is Everest and UGC, WONDER WHAT PAVELS THINKING NOW ABOUT THE EXTRA $25 MILLION OF BONDS THAT THEY ISSUED.
This is actually excellent news for equity shareholders. At least $50m of the $125m have converted, which means that they are on an equal playing field. This should be share price positive as on this we don’t have incremental dilution risk.
Working stiff, look at Lawrence 13 post its $48,6 m not 48.6 thousand Looks like they had about 40% of the convertible bonds