16 Nov 2020 13:09

Former Gazprom executive's investment co to acquire Volga Gas for $25 mln

MOSCOW. Nov 16 (Interfax) - GEM Capital Holdings, controlled by Anatoly Paliy, who was an executive in Gazprom entities for over ten years, is buying 100% of U.K.-based Volga Gas, which is engaged in production of hydrocarbons in the Volga Region.

The proposal announced in a statement by the investment firm envisages that Volga Gas shareholders will be entitled to receive 23.71 pence per share, which allows for an assessment of the entire existing issued ordinary share capital of Volga Gas (excluding treasury shares) at approximately 19.16 million pounds sterling (about $25 million).

The funds will be paid to shareholders through a loan provided by Paliy to GEM.

If, on or after the date of publication of the offer, dividends, other distributions or capital refunds of Volga Gas have been approved, declared, made or are due, GEM reserves the right to reduce the offer price by the total amount of such dividends, distributions or capital refunds. The deal may be executed subject to the approval of 90% of shareholders.

In the event that GEM obtains approval of its proposal from at least 75% of those voting, GEM intends to ensure that an application for delisting of Volga Gas from the AIM London Stock Exchange is filed with the appropriate authorities. The company will give at least 20 business days' notice of the proposed delisting after the date on which the offer becomes unconditional in all respects.

If GEM does not receive sufficient approval of the offer, the company intends to seek delisting with LSE after the completion of the transaction in accordance with other provisions of AIM rules.

GEM will also need approval from the Federal Antimonopoly Service (FAS) to acquire shares in Volga Gas. The Board of GEM is confident that approval will be obtained shortly.

Certain institutional and other shareholders of Volga Gas have already made irrevocable commitments to GEM to accept (or ensure acceptance) the offer. This includes the Baring Vostok fund, which holds a total of approximately 80.07% of the gas company.

"We believe Volga Gas has significant potential, but given its size, operating environment and geographic focus, it will develop much better as a privately owned company with a simplified and more profitable corporate structure that enjoys our support," GEM Director Thomas Keane said.