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Petropavlovsk – board structure update amidst attempted coup

By Tom Winnifrith & Steve Moore | Wednesday 17 May 2017

Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Petropavlovsk (POG) has updated on the attempted boardroom coup – including on its process to appoint an independent Non-Executive Chairman, a further independent Non-Executive director and opposition to the requisitioning shareholder nominees.

There is an already-initiated process for appointing an independent Non-Executive Chairman, but the company intends to appoint current non-exec, Andrew Vickerman, to the role for an interim period, taking over from current Executive Chairman, Peter Hambro, who would remain an Executive director.

It is added “the company is also continuing its process to appoint a fourth independent Non-Executive director” and that “although currently fully compliant for a company of its size, following these changes, the board structure will be in line with best practice corporate governance requirements for larger companies as well”.

Since a 2015 restructuring, “significant achievements” are emphasised – including a return to profitability in 2016, a strong start to the current year and POX Hub project progress – these “reflected in the performance of the company's share price, which has risen by around 50% since the 2015 Restructuring, which was conducted at an issue price of 5 pence per share”.

The company also questions the independence of the requisitioning shareholder nominees given their links with companies in which the requisitioning shareholders have invested, though adds it “remains willing to continue discussing its board restructuring proposals with the requisitioning shareholders”.

This offers some hope of an agreement being reached, but we concur with the company that the move is perplexing with some decent recovery progress currently looking to be made. As such, FIML (owned by a trust whose beneficiaries are the dependants of Tom Winnifrith) continues to stand behind the current board with its shareholding and the stance is to back the current board and, re. the shares, to hold.

This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tips from Tom & Steve and a new shorting piece from Lucian this week click HERE

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