27 Nov 2009 19:41

Court invalidates Onexim offer to TGK-4 minorities

MOSCOW. Nov 27 (Interfax) - The Moscow Arbitration Court has invalidated a mandatory offer made by Mikhail Prokhorov's Onexim on July 14, 2008 to buy out minority shareholders in the TGK-4 generating company, an Interfax correspondent reported from the court.

The court granted a suit filed by Onexim Group Ltd against Onexim Holdings Ltd to invalidate the offer.

The BVI-registered Onexim Group Ltd on October 17, 2008 filed a lawsuit in Moscow Arbitration Court against Cyprus-based Onexim Holdings Ltd, demanding that the offer to TGK-4 shareholders be declared invalid.

A source at Onexim told Interfax at the time that the lawsuit was filed to avoid a number of legal conflicts over the fact that the group is going by one set of laws in the situation with the offer, while the regulator and depositories are referring to others.

"A situation could arise where the shares of minority shareholders begin to be deposited in the account of Onexim, but the group will not be able to pay for them, as under the law it cannot increase its stake in TGK-4 above 50%," the source said.

Onexim said on October 13, 2008 that it would not proceed with a mandatory offer to buy out shareholders in TGK-4 because it needs special permission from the government to increase its stake to more than 50%. The group said this became a requirement because TGK-4 has been placed in the register of natural monopolies, which automatically puts it under the jurisdiction of the law regulating foreign investment in strategic sectors.

Onexim Holdings is technically a foreign company. TGK-4 minority shareholders, who were prepared to tender about 40% of the company's shares in the offer, think that Onexim is just trying to avoid fulfilling the mandatory offer.