(Bloomberg) -- Russian gold miner Petropavlovsk Plc will file for administration as it negotiates the sale of its subsidiaries, after the company was hobbled by sanctions on a key partner.  

The company’s board of directors will seek a hearing of the administration application at the High Court in London in the coming days, it said in a filing Tuesday. The application will include the appointment of Allister Manson, Trevor Binyon and Jo Rolls of Opus Business Advisory Group as administrators of the company.

London-listed Petropavlovsk’s stock has plunged more than 90% since Russia invaded Ukraine in February. The company -- which has its main operating mines in the Amur region, in Russia’s Far East -- was unable to sell gold following UK sanctions on Gazprombank, which acted as off-taker of all the company’s gold production under the conditions of two loans. 

Once one of London’s biggest gold miners, Petropavlovsk stood on the cusp of joining the UK’s benchmark FTSE 100 Index a little more than a decade ago.

Yet the company, founded by banking scion Peter Hambro, was forced into a debt-for-equity swap to save the company, leading to years of boardroom turmoil after a series of Russia-focused businessmen took a large stake and pushed for changes.

Now, the war and the sanctions that followed have compounded the company’s woes. The company has been in default since April after it was unable to meet a request to repay Gazprombank a term loan and a revolving credit facility for a total of $288.1 million. The miner has a $304 million note due in November, and a $33 million convertible bond due in 2024.

Share Suspension

According to Tuesday’s filing, the company requested that trading of its shares on the London Stock Exchange be suspended and it plans to request the suspension of its shares on the Moscow Exchange “in due course.” 

The company is in talks with two parties interested in buying its operating subsidiaries, according to the filing. Discussions with both are ongoing, but may not result in a sale, the company said. 

Even if the sale takes place, it’s “highly unlikely that there will be any return to shareholders given the level of the group’s indebtedness,” the company said in the filing. Petropavlovsk had assets at book value amounting to about $1.6 billion, while its liabilities came to about $1.7 billion as of June 30, it said.

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