Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Peter Hambro in May 2017. Image: Proactive Investors via YouTube
By Barbara Lewis
LONDON, June 22 (Reuters) – Shareholders voted for four new board members at Russian-focused gold miner Petropavlovsk on Thursday, ousting Peter Hambro who has run the company since he founded it in 1994.
Rebel shareholders, holding around 40 percent of the company, backed nominees to replace four out of six of the board at Petropavlovsk, including Hambro, Hambro said.
The new appointments include Bruce Buck, who is chairman of Chelsea Football Club, and Vladislav Egorov, who works for Renova, Russian billionaire Viktor Vekselberg’s conglomerate.
Speaking after the annual general meeting at a city lawyers’ offices on the banks of the Thames in London, Peter Hambro said he could not disguise his disappointment.
But he hoped “with all my heart” the new board would build on progress he said the company had made.
“I will enjoy my new role as an ordinary shareholder and in it I shall advocate for a continuation of the same transparency, diligence and good corporate governance that I believe we achieved at Petropavlovsk,” he said.
In an initial report, shareholder adviser ISS recommended against supporting any of the proposals from rebel shareholders, but last week, it issued revised advice, saying it had received additional information.
However, ISS only recommended backing two of the dissidents’ nominees — namely, Garrett Soden, who has worked for the Lundin group of companies for a decade, and Ian Ashby, nominated to be chairman.
Ashby headed BHP’s, iron ore division from 2006 to 2012 and was named in May as a non-executive director at Anglo American.
Any shareholder holding more than 5 percent can call an extraordinary general meeting and require the circulation of a resolution.
Renova is Petropavlovk’s biggest shareholder with 14.65 percent, according to Reuters data.
Other major shareholders DE Shaw, M&G and Sothic, which together hold 25 percent, said in a statement last week they had no intention of taking control of the company and were not acting with Renova, which has declined to comment.
Hambro, who holds 4.6 percent, had accused the rebel shareholders of pursuing a “takeover by stealth” but the Takeover Panel found there was no legal requirement for a formal takeover bid.
He agreed earlier this year to stand down as chairman and instead be an executive director.
In the years before a restructuring in 2015, Petropavlovsk’s equity value collapsed.
The share price has recovered from lows around 2 pence at the end of 2014 to just over 7 pence, boosted by a return to profit in 2016. So far this year, it has risen 4.32 percent. (Editing by David Evans)
