Sibir provides £21m for Russian setback

Click to follow
The Independent Online

Sibir Energy, the Aim-listed Russian oil explorer, tried to reassure investors that it was in good financial health yesterday, in spite of the recent crisis which has seen its 50 per cent stake in a joint venture with Roman Abramovich's Sibneft mysteriously diluted to just 1 per cent.

Sibir Energy, the Aim-listed Russian oil explorer, tried to reassure investors that it was in good financial health yesterday, in spite of the recent crisis which has seen its 50 per cent stake in a joint venture with Roman Abramovich's Sibneft mysteriously diluted to just 1 per cent.

Reporting its full-year results yesterday, Sibir, whose shares have been suspended since the problems were brought to light in April, said it had more than halved its losses in 2003, reporting an overall pre-tax loss of £13.7m compared with £31.5m in 2002.

It reiterated that it had now restored its holding in the joint venture, the Moscow Oil and Gas Company, to 45 per cent via a new share issue from the company, and would now be looking to pursue those who had engineered the dilution.

Sibir added that its lawyers had advised the company that the dilution was illegal under Russian law.

The company said that as a precaution, it had set aside £21m to cover any potential loss from the incident, but added that it was confident of recovering the assets.

It said its advisers were now in talks with AIM about bringing an end to the current suspension of shares, but conceded that the resumption would now not take place until August.

In a statement, Sibir said: "We are advised that it is essential that we ensure there is no false market in the shares at the time of resumption. A premature resumption of trading in the absence of full information about the immediate plans which the company intends to present to shareholders in July would run the risk of just such a false market in the shares. Because we are expecting to make material announcements over the next few weeks we expect that resumption of trading on AIM will not occur until August."

Comments