Madagascar Oil shares suspended on licence bid

Shares in Madagascar Oil have been suspended, less than three weeks after the company was listed, because the island's government has made moves to buy back the company's licences.

Texas-based Madagascar Oil raised £50m on London's Alternative Investment Market at the end of November, with a view to proving the estimated 1bn barrels in its Tsimiroro field, and testing the technology needed to steam out the heavy oil.

However, the Madagascan government is now circling Tsimiroro, with "no guarantee that any price will be representative of fair value", the company said yesterday, though it plans to "robustly defend its position". Its Bemolanga field to the north, which is part-owned by Total, is not affected.