Ruspetro Regulatory News (RPO)

Ruspetro plc, General Meeting of Shareholders Convened To Approve Conversion of Limolines Transport Limited Outstanding Loan to Ordinary Shares in Ruspetro plc.

1 February 2013

Further to the announcement dated 25 January 2013, Ruspetro plc ("Ruspetro" or the "Company") is today posting a circular to shareholders in relation to the proposed conversion into ordinary shares in Ruspetro plc of outstanding debt owed to Limolines Transport Limited ("Limolines") by Ruspetro Holding Limited.

In January 2012, Limolines, Ruspetro's largest shareholder, Ruspetro Holding Limited and the Company entered into a deed of amendment (the "Deed of Amendment"), pursuant to which they agreed that the Company would, subject to certain conditions, issue new ordinary shares to Limolines on the date that is 13 months from the date of Admission, in full and final satisfaction of Limolines' loan to the Company (the "Conversion"). On the 25 January 2013 the Company and Limolines entered into a supplemental deed to vary the terms of the Deed of Amendment such that the conversion price would be fixed at 134 pence per share.

The Directors have therefore convened a general meeting of shareholders on 18 February 2013 at 10.30 a.m. to obtain the necessary shareholder approvals required for the Conversion. This will be held at the offices of White & Case LLP, 5 Old Broad Street, London EC2N 1DW.

Details of the resolutions and the recommendations of the Directors can be found later in this announcement, but shareholders are advised to read the circular in full, which includes the notice of general meeting.

It is important that you complete, sign and return the Form of Proxy for use at the General Meeting enclosed with this document whether or not you intend to attend the meeting.

For your vote to count the Form of Proxy must be received by Capita Registrars by 10.30 a.m. on 14 February 2013. These can be sent or delivered to Capita Registrars at PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.

If the resolutions are passed at the General Meeting, the Conversion is expected to take place on 25 February 2013.

Enquiries

Investors / Analysts:Dominic Manley, Ruspetro plc+44 207 318 1265

Media:Patrick Handley / Catriona McDermott, Brunswick Group LLP+44 207 404 5959

Further Details About the Conversion and the General Meeting

Upon the implementation of the Conversion, and assuming a sterling equivalent of the amount due to Limolines under the facility of approximately £39.7 million, the Company will issue 29,619,102 Conversion Shares to Limolines. 

On this basis, the Conversion Shares will represent approximately 8.16% of the enlarged share capital. As a result, Limolines will hold approximately 35.47% of the enlarged share capital. Following the issue of the Conversion Shares, existing shareholders will suffer a dilution of approximately 8.16% to their interests in the Company.

The Conversion is conditional on the completion of the proposed offering of the Senior Secured Notes (the "Notes") announced on 25 January 2013 and the proceeds from the proposed offering of the Notes will only be released to the Company after the approval of the Conversion by Ruspetro shareholders. Completion of the Conversion will be dependent on obtaining the necessary shareholder approvals required at the General Meeting of shareholders.

The Board considers that the Conversion will:

·; improve the financial position of the Company by reducing the overall leverage of the Company;

·; assist the Company in the successful completion of the offering of the Notes and be a condition to securing the B- credit rating from S&P on the Notes;

·; convert approximately US$62.8 million in long-term debt into equity at a conversion price which stands at a substantial premium to the current market price of the ordinary shares and a resulting substantial discount to the outstanding value of that debt;

·; trigger a new revolving facility at an initial level of US$50 million extended to the Company by Sberbank but conditional on the repayment of the existing Sberbank facility from the proceeds of the Notes offering; and

·; give the Company strategic and operational benefits in relation to further development activities that it may wish to undertake by reducing its longer term refinancing requirements.

The following resolutions will be put before shareholders at the General Meeting:

(a) Resolution 1, which will be proposed as an ordinary resolution and which is subject to the passing of Resolutions 2, 3 and 4, is to authorise the Directors to allot relevant securities (i) up to an aggregate nominal value of £3,100,000 in connection with the Conversion and (ii) otherwise than pursuant to paragraph (i) up to a maximum nominal amount of £11,112,716 (the same as for the Company's 2012 AGM, as this resolution shall replace the equivalent authority to Directors granted at such AGM). This authority will expire 15 months after the date of the passing of the resolution or at the next AGM of the Company;

(b) Resolution 2, which will be proposed as an ordinary resolution, seeks the approval of independent shareholders of the entering into by the Company of the Supplemental Deed as a related party transaction for the purposes of Chapter 11 of the Listing Rules;

(c) Resolution 3, which will be proposed as an ordinary resolution and which is subject to the passing of Resolution 2, seeks the approval of independent shareholders of the Conversion as a related party transaction for the purposes of Chapter 11 of the Listing Rules;

(d) Resolution 4, which will be proposed as an ordinary resolution and which is subject to the passing of Resolutions 1 and 5, seeks the approval of independent shareholders to waive the obligation on Limolines which would otherwise arise under Rule 9 of the City Code as a result of the issue of the Conversion Shares; and

(e) Resolution 5, which will be proposed as a special resolution and which is subject to the passing of Resolution 1, disapplies statutory pre-emption rights, provided that such authority shall be limited to, inter alia, (i) the allotment of equity securities in connection with the Conversion and (ii) otherwise the allotment of equity securities up to an aggregate nominal amount of £1,666,907, representing 5% of the Issued Share Capital prior to the issuance of the Conversion Shares (the same as for the Company's 2012 AGM, as this resolution shall replace the equivalent authority to Directors granted at such AGM). This authority will expire 15 months after the date of the passing of the resolution or at the next AGM of the Company.

Only independent shareholders will be entitled to vote on Resolutions 2, 3 and 4 and Resolution 4 shall be taken on a poll. Accordingly neither Limolines, nor any associate of Limolines, will vote on Resolutions 2 or 3 and neither Limolines, nor any concert party of Limolines, will vote on Resolution 4.

Resolution 1 is being proposed to grant the Directors authority to allot new Ordinary Shares (as required by section 551 of the Companies Act 2006) in satisfaction of the Company's obligations in respect of the Conversion. Additionally, the issue of Ordinary Shares to Limolines pursuant to the Conversion is classified as an issue of shares for cash consideration. Pursuant to section 561 of the Companies Act 2006, any issue of new Ordinary Shares for cash consideration is required to be offered to existing holders of Ordinary Shares in proportion to their existing holdings (the statutory pre-emption rights), unless the Directors are authorised to disapply or modify this statutory pre-emption right by special resolution in accordance with section 571 of the Companies Act 2006. Resolution 5 is being proposed as a special resolution to permit the Directors to allot and issue the Conversion Shares to Limolines on a non pre-emptive basis. 

Irrevocable Undertakings

The following shareholders, representing approximately 0.08% of the Issued Share Capital, have irrevocably agreed to vote in favour of all of the Resolutions in respect of the Ordinary Shares they control:

In addition, the following shareholders, representing approximately 20.8% of the Issued Share Capital, have irrevocably agreed to vote in favour of the Resolutions other than Resolution 4 in respect of the Ordinary Shares they control:

In addition, Limolines has irrevocably agreed to vote in favour of Resolutions 1 and 5 (but not Resolutions 2, 3 and 4) in respect of its 99,150,000 Ordinary Shares, representing 29.74% of the Issued Share Capital. 

Directors' Recommendations:

The Independent Directors, who have been so advised by Merrill Lynch, consider that the Rule 9 Waiver and the Conversion are fair and reasonable and in the best interests of the Company, its shareholders as a whole and its independent shareholders. In providing advice to the Independent Directors, Merrill Lynch has taken into account the Independent Directors' commercial assessments.

The Independent Directors recommend that independent shareholders vote in favour of the Whitewash Resolution as they intend to do in respect of their own beneficial holdings of Existing Ordinary Shares, representing in aggregate approximately 0.08% of the issued share capital of the Company at the date of this document.

The Board, which has been so advised by Merrill Lynch, considers that the Related Party Transaction is fair and reasonable as far as shareholders are concerned. In providing advice to the Board, Merrill Lynch has taken into account the Directors' commercial assessments.

In addition, in the Board's opinion the Related Party Transaction is in the best interests of the independent shareholders as a whole and accordingly, recommends that independent shareholders vote in favour of the Related Party Transaction Resolutions as the Directors intend to do in respect of their own beneficial holdings of Existing Ordinary Shares, representing in aggregate approximately 20.88% of the issued share capital of the Company at the date of this document.

The Board also considers that the other Resolutions to be fair and reasonable and in the best interests of the Company and its shareholders as a whole.

The Board recommends that shareholders vote in favour of the other Resolutions as the Directors intend to do in respect of their own beneficial or deemed holdings of Existing Ordinary Shares, representing in aggregate approximately 20.88% of the issued share capital of the Company at the date of this document.

About Ruspetro

Ruspetro plc is an independent oil & gas development and production company, listed on the London Stock Exchange (LSE: RPO). The Company's operations are located on three contiguous license blocks in the middle of the Krasnoleninsk Arch in Western Siberia. Ruspetro assets include proved and probable (2P) reserves of over 1.5 billion barrels of oil.