IDCBY Industrial and Commercial Bank of China Ltd (PK)

By Oliver Griffin

Petropavlovsk PLC (POG.LN) has reduced its guarantee regarding a loan held by IRC Ltd. (1029.HK) after restructuring the Hong Kong-listed company's debt with Industrial & Commercial Bank of China Ltd. (1398.HK).

The mining company, which has operations in Russia, served as the guarantor for a loan granted by the Chinese bank to IRC, in which Petropavlovsk owns a 31% stake.

Petropavlovsk in October said it secured a new loan with a Russian bank worth $240 million. On Wednesday, the mining company confirmed Gazprombank (GZPR.RS) will supply the loan to LLC Kimkano-Sutarsky Mining and Beneficiation Plant, a wholly owned subsidiary of IRC.

Following a scheduled repayment by Kimkano-Sutarsky on Dec. 20 in connection with the ICBC Facility, the total amount outstanding will be around $169 million. This is expected to be repaid in full using the new facility.

As a result of the refinancing, Petropavlovsk said its current guarantee in regards to IRC's loan will initially fall from $204 million to $160 million.

The company said it will provide IRC with a further bridging loan worth $27 million at an interest rate of 16% a year. Taken with an existing bridging loan, IRC will owe $57 million to Petropavlovsk.

IRC will also pay the guarantee fee of approximately $6 million it owes to Petropavlovsk.

Write to Oliver Griffin at oliver.griffin@dowjones.com; @OliGGriffin

(END) Dow Jones Newswires

December 19, 2018 03:34 ET (08:34 GMT)

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