Gold miner Petropavlovsk and Hong Kong-based IRC, in which it is a large shareholder, are continuing negotiations with the Industrial and Commercial Bank of China (ICBC) to amend the repayment schedule of a $340-million project finance facility.
Petropavlovsk is the guarantor of the project finance facility between IRC subsidiary Kimkano-Sutarsky Mining and Beneficiation (K&S), with the outstanding amount at March 31 being $234-million.
K&S has to make a $35.16-million payment to ICBC on June 20. IRC and Petropavlovsk have approached the ICBC to request an amendment of the repayment schedule and to obtain waivers in respect of obligations to comply with certain financial covenants. IRC has also requested ICBC to waive the obligation to maintain certain cash deposits with ICBC.
Petropavlovsk said on Wednesday that no agreement had been reached with ICBC yet and that it was pursuing a “number of options” to ensure the continued good standing of the facility. These include the full refinancing of the ICBC facility with a Russian lender. The company reported that talks were now well progressed.
The company is also exploring a potential short-term advance to IRC to fund a portion of the June debt obligations if necessary.
Petropavlovsk cautioned that should it default on the ICBC debt, it could cause all of the group’s debt arrangements to become repayable on demand.