A crypto tycoon, banking heir and the fight for gold

LONDON: The battle for some of Russia’s richest gold mines has an unusual cast of characters: the scion of one of Europe’s great banking families, a Kazakh tycoon with his own cryptocurrency, hedge fund DE Shaw, and mystery shareholders.

They’re all part of a new fight for control over Petropavlovsk Plc, a London-listed miner.

For the second time in a year, the company is in the middle of a shareholder coup to throw out the board and revive its fortunes.

A decade ago, Petropavlovsk was worth US$3bil and was mentioned as a future member of the benchmark FTSE 100 Index, but sinking gold prices and management missteps reduced it to a penny stock.

The company, started by Pavel Maslovskiy and banking heir Peter Hambro, still owns profitable mines and a new plant that’s about to start operating.

“It’s a turnaround story,” said Ivan Mazalov, director at Prosperity Capital Management Ltd, a Russia-focused asset manager that recently bought shares.

Petropavlovsk cut gold output in recent years to focus on more profitable ounces, and so far it seems to be working. Last year, the company reported the highest net income since 2012, and the big hope is that a new processing method will allow mining of more complicated ores.

But to achieve a comeback, Petropavlovsk needs to fix a fissure in the company that has erupted this month.

On one side are a pair of mystery shareholders trying to oust the board and bring back old directors.

On the other side are owners including DE Shaw that threw out the executives last year.

The two unidentified shareholders – CABS Platform Ltd and Slevin Ltd – are registered in Gibralter and Anguilla, respectively and own a 9.1% stake.

It’s not publicly known who is behind these holding companies.

The ultimate kingmaker is likely to be Kazakh tycoon Kenes Rakishev, the biggest shareholder and son-in-law of a former Kazakh deputy prime minister.

The executive, who holds investments in banks, mobile phones and infrastructure projects, bought a stake in Petropavlovsk in December. — Bloomberg