Shares in FTSE 250 gold miner Petropavlovsk (POG) have plunged 12% to 27.2p as the Russian company faces a boardroom coup.
The miner has a long history of boardroom battles and this latest one sees its board of directors voted out by new major shareholder UGC.
Chief executive Pavel Maslovskiy and chairman Sir Roderic Lyne are set to depart following today’s annual general meeting, which had low enough levels of voting due to the coronavirus pandemic to allow four shareholder groups – UGC (22.37%), Everest Alliance and Slevin (12.09% combined) and Fortiana Holdings (4.62%) – to move in their own people.
Co-founder Peter Hambro is set to return to the business as interim chairman, with current deputy chief executive Dr Alya Samokhvalova taking the top job and Maxim Kharin joining as a director.
‘HIGHLY SURPRISING TURN OF EVENTS’
Canaccord Genuity analyst Sam Catalano called the coup a ‘highly surprising turn of events’, adding that near-term uncertainty may unsettle investors.
Catalano said, ‘The new CEO is Dr Alya Samokhvalova, who is well known and liked by the market. Furthermore, former CEO Dr Pavel Maslovskiy remains with the company as chief operating officer, meaning operational continuity should not be a concern.’
He added, ‘We continue to believe that at the asset level, Petropavlovsk has the potential to create further value for shareholders, and while we also acknowledge that the board has acted quickly to stabilise the situation, this is likely to add a layer of near-term uncertainty to the stock for many investors.’
‘NO REASON FOR CHANGE’
Chairman Sir Roderic Lyne insisted the coup was against the wishes of most shareholders, pointing out the company’s share price has risen faster than any other listed gold miner. In the past year, its share price has increased by around 280% with the company now having a market cap of £900 million.
Lyne said, ‘The majority of our shareholders have shown their strong support and see no valid reason for a change. I do not believe that they want effective control of their company to be taken from them by stealth and to be wielded by a small group of shareholders.’
He added that in the period until the next shareholder meeting, the board will be focused on ensuring the company is ‘properly managed’ by an interim team of directors and executives with ‘detailed knowledge of the company and its operations.’
Lyne said it will then be for ‘all shareholders to decide the future of the company’ at a general meeting in ‘full knowledge of the facts.’