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Relieving the pressure: UK investors have been given a way out of their worries over Sibir
Relieving the pressure: UK investors have been given a way out of their worries over Sibir

Gazprom rides to rescue of Sibir's UK shareholders

Hugo Duncan
26 May 2009


From fraud allegations and political feuds to corporate governance issues and suspended shares - the ill-fated London listing of Russian oil company Sibir has seen it all.

But today, after months of turmoil, hundreds of UK shareholders were finally offered a way out when Kremlin-owned Gazprom Neft agreed to buy their shares for 500p each.

It was a major relief for investors who have watched in horror following the suspension of Sibir shares in February at 174¼p amid allegations of fraud at the heart of the company.

The firm is suing leading shareholder Chavla Tchigirinski after it emerged the property developer owes it $400 million.

Tchigirinski, who has fled Russia, has handed over his Cote d'Azur villa and London mansion to help cover the bill, while the scandal cost former chief executive Henry Cameron his job.

Today's offer by Gazprom Neft almost triples the price the shares were suspended at and is nearly 12 times the 43p low they sank to late last year.

However, it is considerably lower than the peak of 814p reached last summer, meaning shareholders who bought at the top stand to make hefty losses. Analysts advised shareholders to sell up, even if it resulted in a loss.

The deal came just days after Gazprom Neft agreed to buy out institutional investors in the UK, again at 500p a share.

Although Sibir remains listed in London, it now in effect ceases to do so for investors as Gazprom owns all the shares available to trade.

Gazprom Neft bought a 16% stake in Sibir last month after outbidding TNK-BP, the joint venture between Russia and the oil giant BP, and increased its stake on Friday to 27.5% when it bought shares from instituional investors in London.

It said at the time it did not want to take its holding above 30% but today's offer would, kif taken up by all small shareholders, raise it to nearly 35%.

Sibir has agreed to waive the rule which states it must make a full bid once the 30% threshold is passed.

The remaining 65% of shares are owned by Bennfield, which represents the holdings of Tchigirinski and his partner Igor Kesayev, and the City of Moscow.

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