Wednesday, 27 May 2009

Gazprom offers escape route for Sibir investors

Hundreds of private investors caught up in the corporate governance scandal at Aim-listed Sibir Energy have been offered a partial reprieve by Gazprom, the Russian state-controlled gas company.
Shareholders are being offered 500p a share for their investments in the Siberian oil-field operator, valuing the company at £1.9bn. The UK-listed company’s shares have been suspended since a corporate governance scandal broke in February.
Gazprom had already bought up much of the remaining stake held by institutional investors, including Blackrock and M&G, by the close of trading last Friday as it increased its stake from 16pc to 27.5pc.
Over the weekend Sibir and its advisers, Strand Partners and JP Morgan Cazenove, agreed a deal which secured the offer for small shareholders. The deal gives Gazprom a waiver on normal UK takeover rules requiring it to make a full approach for their holdings.
A source close to the situation said that the eleventh-hour agreement had “averted a disaster for minority shareholders”, who are believed to own just over 5pc of the company. The rest of Sibir’s shares are thought to be owned by Russian investors.
However, despite the huge premium to the 174¾p suspension price, the deal still falls short of last June’s trading peak of 814p and saw investors angry at the demise of what was once the biggest company listed on Aim.
Sibir’s shares have not traded since its founder Henry Cameron stepped down and was later dismissed over controversial “unauthorised payments” relating to property deals with Chalva Tchigirinski, a major shareholder in the company.
It emerged Mr Tchigirinski had borrowed $325m (£203m) from Sibir, rather than $115m originally disclosed. He sold real estate assets to the company in return for the money, but that deal later fell apart and Sibir is now suing the oligarch to return the cash he received.
Sibir has been able to pay down $80m of the outstanding debt after an additional shareholding held by Mr Tchigirinski was uncovered by advisers and sold to Gazprom.
When the scandal first broke, commentators cited it as an example of the sometimes dangerous and erratic nature of doing business in Russia. Major energy giants such as BP have been hit by political machinations in the country which have affected their business.
The success of Sibir meant it had become an example for a raft of Russian oil, gas and mining companies which used the lightly regulated Aim market to raise funds.
Gazprom’s offer, made through its Neft oil arm, has been recommended by the board of Sibir, which is due to report annual results on Friday.
Neft bought 16pc of Sibir in April after trumping rival TNK-BP, which had offered to buy the company in a £2.3bn deal last year.
Sibir produces oil at the Salym field in western Siberia in a joint venture with Shell and operates a refinery in Moscow alongside Neft. If investors take up Gazprom’s offer for their holdings, the deal would give Gazprom’s operation control of the 200,000 barrels per day produced through the refinery.
Mr Tchigirinski is understood to have fled Russia.

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