FX.co ★ New gold-mining enterprise to be founded in Russia

Petropavlovsk company plans to merge with Vekselberg’s Kamchatka Gold, so the second largest gold-mining enterprise could be founded in Russia.

After the merger, the companies may be consolidated with Highland Gold headed by Roman Abramovich or GV Gold. However, the deal may fail to be initiated as it is too complicated and Petropavlovsk is in debt. Besides, it would be rather difficult to manage this joint venture.

Renova group owned by Viktor Vekselberg holds a 22.34% stake and 6.88% of convertible bonds in Petropavlovsk. If the Board of Directors is changed, Kamchatka Gold may merge with Petropavlovsk.

Reportedly, preliminary negotiations with Highland Gold and GV Gold were held about a possible merger with the consolidated company.

Renova wants to save its investments, as there was a disagreement between the group and founders of Petropavlovsk Peter Hambro and Pavel Maslovsky who own more than 9% of shares.

The cost of Petropavlovsk was estimated at $500 million.