Kazakh oligarch vows new start for gold miner Petropavlovsk after taking 22pc stake

Kenes Rakishev
Kenes Rakishev bought a 22pc stake in Petropavlovsk in December

The Kazakh oligarch who became the biggest shareholder in London-listed Petropavlovsk last month with a 22pc stake has vowed to make “fresh start” with the gold miner - and may even change its name.

Kenes Rakishev, an entrepreneur and former banker who has also held a number of mining assets in his varied career, said he would be presenting his “vision” for the company to the board and fellow shareholders, including a rebrand. He added that he made the deal because of the miner's strong production track record and proven resources in the ground.

“This is really a new history starting. Petropavlovsk cannot grow as fast as investors want - but we can do through this through mergers and acquisitions. Petropavlovsk should have diversification,” he said, adding that he was eyeing “undervalued” gold operations throughout Russia, Kazakhstan and Kyrgyzstan.

a worker
Petropavlovsk operates four gold mines in the far east of Russia

Mr Rakishev, whose father-in-law is the former prime minister of Kazakhstan and current ambassador to Russia, reiterated his desire to lure back Petropavlovsk’s founding chief executive Pavel Maslovskiy. He said he had held initial conversations with Mr Maslovskiy, adding that it was “very logical” that he complete a project to build a new gold processing plant that is “65pc complete”.

Mr Maslovskiy quit last summer just weeks after a boardroom coup ousted his co-founder Peter Hambro from the chairmanship.

Mr Hambro, who set up the company as Peter Hambro Mining in 1994, lost a very public battle with Russian investors Renova and investment funds M&G and Sothic Capital Management over the direction of the company.

Peter Hambro
Peter Hambro was ousted last year

It was widely thought Renova, the industrial conglomerate led by billionaire Viktor Vekselberg, intended to merge Petropavlovsk with some of its own gold assets, but it abruptly sold its stake to Mr Rakishev in December for an undisclosed sum.

“I came here to bring more value and more profit to the company,” Mr Rakishev said. “I will be a long-term investor if things go well.”

He suggested Mr Hambro could have an “honorary rather than operational” role in the company.

Petropavlovsk, which operates four gold mines in the far east of Russia, has been a cautionary tale in the City for years; it borrowed heavily to fund expansion just as the gold price tumbled earlier this decade and found itself saddled with debt, knocking its market value.

But Mr Rakishev insisted Petropavlovsk’s net debt, which stands at around $560m, is “workable” and a recent refinancing gave it “flexibility” to consider deals.

The serial investor, who is also backing a cryptocurrency and a blockchain-based smartphone, hit the headlines in the UK a few years ago for his alleged role in helping broker a £15m deal for Prince Andrew to sell his home to another Kazak oligarch, Timur Kulibayev, in 2007.

Mr Rakishev said the story had been disproven. “Everybody wrote about it when that story came out, but when it was proved it was not true, nobody came to me and said sorry,” he said.

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