Petropavlovsk doesn’t have money, the company wants to restructure its bonds

Unprofitable gold mining company Petropavlovsk has proposed holders of its bonds to the amount of $310.5 million to defer redemption of the securities for a period of over four years - until October 2019. Major lenders are not willing to give the company new loans and require to partially repay the existing ones, because of what Petropavlovsk plans an additional issue. Experts note that the conditions for the conversion of bonds are not very attractive.

The gold mining company Petropavlovsk has disclosed proposed to investors terms of the restructure of the bond issue for $310.5 million, which it must repay in February 2015. Petropavlovsk offers holders of the bonds to exchange them for new bonds maturing in October 2019, the coupon rate will increase from 4% to 7.5% per annum. In addition, upon requirement of creditors (the main ones are VTB - about $200 million, and Sberbank - $500 million) Petropavlovsk will have to issue new shares. One of the state-owned banks, with which the negotiations on the revision and prolongation of the covenant vacations (which will end in December 2014) are carried out from the spring, insisted on other sources of funds for the bonds restructure, Petropavlovsk reports. And "one of the major creditors" warned that it might require to pay a part of the debt or to increase deposits.