Urals Energy Plc Regulatory News (UEN)

13 Jan 2009 13:22



Urals Energy Public Company Limited 

('Urals Energy' or the 'Company') 

Update re Taas Yuriakh Put Arrangements and Restructuring Intentions

Taas Yuriakh Put Arrangements

Urals Energy today provides an update on discussions regarding certain arrangements entered into with Limenitis Holdings Limited ("Limenitis") at the time of the purchase of the Company's stake in Taas Yuriakh ("Taas") in November 2007. LHL is a private limited company incorporated in Cyprus and owned by certain investment funds managed by Ashmore Investment Management Limited.

In November 2007 Limenitis agreed to purchase a 10.5% interest in Taas. The price paid by Limenitis was US$175 million in cash, representing the same price per share in Taas as that paid by the Company. At the same time Limenitis was granted the right, upon the occurrence of certain events, to put its shares in Taas to the Company no earlier than one year from the initial closing of the transaction for an amount equal to US$175 million plus interest at the rate of 14% p.a. to be satisfied in cash or, at Limenitis' option, 50% in cash and 50% in Urals Energy shares, valued at a price determined by the average closing price of the Company's shares in the two-week period following the initial closing of the Taas transaction (the "Put").

Following the Company's announcement on 6 January 2009 of its intention to dispose of its shares in ZAO Dulisma and Taas Yuriakh to Sberbank, in discharge of its loan obligations to Sberbank, the Company has agreed with Limenitis that Limenitis:

1. Will not exercise the Put before the Sberbank loan restructuring is complete; and

2. Will, on completion of the Sberbank loan restructuring, agree and execute documentation with Urals Energy with a view to terminating the Put.

Restructuring Intentions

Further to the Company's announcement on 9 January 2009 regarding its EGM and restructuring intentions, the Company takes this opportunity to reiterate two important aspects of its plans.

Firstly, as previously announced the proposed disposals to Sberbank will eliminate both the largest indebtedness of the Company with Sberbank and relieve the Company of the obligations to trade creditors of the companies transferred to Sberbank. Specifically, the Company expects that all outstanding liabilities to contractors and suppliers retained by ZAO Dulisma in relation to its development activities will pass to Sberbank as part of the disposal arrangements.

Secondly, the Company's stated intention to seek a working capital line of credit to allow the Company to continue in business is designed solely to facilitate the marketing and sale of its remaining assets and the realisation of any net proceeds or other value to shareholders. It is not the intention to restructure the Company to operate on an ongoing basis and the Directors expect to cancel the Company's admission to AIM following the disposal of the assets.

 Further announcements will be made in due course.

13 January 2009

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