Ashurst advised the ad hoc committee of bondholders in connection with the recapitalisation of Petropavlovsk PLC, one of the Russia's leading gold mining groups with total group financial indebtedness of bank and bond debt of over $1 billion.

The recapitalisation includes a new five-year $100 million convertible bond and a $235.4 million rights issue, underwritten in cash and debt by the bondholders and in cash by the founding shareholders.

The principal purpose of the recapitalisation is to address the repayment of existing bonds in March 2015 and to effect the extension of the existing bank facilities. The transaction has been approved by shareholders and bondholders with the completion of the rights issue and underwriting to occur at the end of March 2015.

This transaction is one of the first of many restructurings that will likely be required in the mining and energy sectors in the future. It was particularly challenging as it involved a complex and novel public debt and equity underwriting structure, was negotiated with the back-drop of Russian sanctions and the deterioration of the Russian economy, and required detailed interaction of expertise in restructuring, publicly listed convertible bonds and publicly listed equity, which Ashurst was able to deliver through its leading practices in each of these areas.

The Ashurst team was led by restructuring partner Simon Baskerville, assisted by senior associate Ru-Woei Foong and associate Alinta Kennedy. Partner Nick Williamson assisted by associate Marianna Kennedy advised on the corporate aspects of the deal. Partner Francis Kucera, assisted by senior associate Scott Chatterton and solicitor Fatin Ibrahim assisted on finance matters. Jennifer Schneck and Tara Waters advised on the US aspects.