Polymetal International has appointed Riccardo Orcel as president after directors left the board of the London-listed Russian gold producer following the invasion of Ukraine.
The Italian was previously the global head of banking at VTB Capital, the investment banking arm of Russia’s second-largest lender, reduce its European operations because of sanctions. He is the brother of Andrea Orcel, the chief executive officer of the Italian lender UniCredit and one of Europe’s most famous bankers.
Polymetal’s announcement Tuesday comes after the FTSE 100 team appointed four new non-executive directors last week following the sudden departure of British chairman Ian Cockerill and five other board directors.
The precious metal miner escaped direct sanctions, but London-listed Russian companies have come under severe pressure because of the Western response to the invasion.
Steelmaker Evraz, owned by billionaire Roman Abramovich, warned on Monday that the inability to pay interest on one of the company’s bonds could force it to default.
Shares in Polymetal, which operates eight mines and a state-of-the-art processing plant in Russia and Kazakhstan, fell 88 per cent to 126p in less than a month since Russia invaded Ukraine.
One of its largest shareholders, the Norwegian sovereign wealth fund, has said it will sell off its investments in Russia.
This month, Polymetal said it was “shocked and appalled” by events in Ukraine as it tried to navigate a road between Moscow and London, which has been a source of billions of dollars in funding for expansion.
The company generates a large portion of its revenue from selling gold to Russian banks, with the central bank being seen as a last resort buyer. It also sells concentrated gold ore to China for processing.
Since the war began, Russia’s central bank has said it will continue to buy gold, two years after ending a long run that spurred local miners.
Investors are questioning whether the group will pay a dividend or choose to preserve cash as it becomes increasingly difficult for Russian businesses to operate.
Orcel joined VTB in 2011, before working at Bank of America, becoming the VP and global head of banking of VTB’s investment banking arm.
Last year, he led a VTB-funded special-purpose acquisition, Emerging Markets Horizon, which raised $250 million in December. Spac plans to target companies with high growth rates in Russia and Central and Eastern European countries.
This month, it said it was assessing the impact of Western sanctions on Russian companies, including VTB.
Orcel also served as a non-executive director of Russian mining company EN+ from 2011 to 2018. EN+ is owned by Oleg Deripaska, a financier under UK and US sanctions.