18 Jun 2009 09:14
Replacement: The following announcement replaces the Placing announcement made by the Company on 18 June 2009 (RNS 0864U), in order to clarify the expected closing date for the Bookbuilding process as 19 June 2009. The Bookbuilding process is expected to close at 4.00pm on 19 June 2009, not 19 July 2009 as originally stated.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA, NEW ZEALAND OR THE REPUBLIC OF IRELAND (EACH, A "RESTRICTED JURISDICTION") OR ANY OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
For immediate release 18 June 2009
Volga Gas plc
("Volga Gas" or "the Company")
Placing to raise US$27 million
Volga Gas, the independent oil and gas exploration and production company with licence areas in the Volga region of European Russia, is pleased to announce that it has raised US$27 million (£16.6 million) before expenses (approximately US$26.6 million/ £16.3 million net) through a placing, subject to, inter alia, the approval of the Shareholders of the Company of 27,000,000 Placing Shares with certain existing investors including certain directors of the Company at a price of US$1.00 (or 61.4 pence) per share.
Summary
Approximately US$26.6 million (£16.3 million) to be raised (net of Placing expenses) subject to Shareholder approval.
Net Placing proceeds to fund forward costs of Grafovskoye # 1 sub-salt well on the Yuzhny Ershovskoye field in the Karpenskiy licence area and also to provide contingency for any cost over-runs.
Remaining funds to be applied to bring forward exploration and development projects within the Group's other existing licence areas.
Baring Vostok has undertaken to subscribe for up to 27,000,000 Placing Shares. This commitment will be reduced to the extent that the Joint Bookrunners and the Company find other Shareholders to subscribe for Placing Shares.
Accelerated bookbuild to be carried out by the Joint Bookrunners to allow existing Shareholders who are Permitted Persons to subscribe for Placing Shares.
The Bookbuilding process is expected to close no later than 4.00 p.m. (London time) on 19 June 2009, but may be closed earlier or later at the discretion of the Joint Bookrunners and the Company.
Mikhail Ivanov, Chief Executive of Volga Gas, said:
"I am delighted that, via this placing, Volga Gas will be able to bring forward the eagerly awaited first sub-salt exploration well in the Karpenskiy licence area, which was one of the key motivations for the formation of the Company. The high specification drilling rig is already assembled on location and the service companies are ready to mobilise, so we look to begin drilling during the third quarter of 2009 on one of the three high impact exploration prospects within the Company's licence interests. Volga Gas's management team is highly appreciative of the support shown by shareholders."
For further information please contact:
| Volga Gas plc | Financial Dynamics |
| Mikhail Ivanov, Chief Executive Officer | Billy Clegg |
| Tony Alves, Chief Financial Officer | Ed Westropp |
| Tel: +44 (0)20 8622 4451 | Alex Beagley |
| Tel: +44 (0)20 7831 3113 | |
| Oriel Securities Limited | Renaissance Capital |
| Nominated Adviser, Joint Broker and Joint Bookrunner | Joint Broker and Joint Bookrunner |
| Richard Crawley | Robert Hagon, Sales Trading |
| Matthew Coakes | Tel: +44 (0)20 7367 7713 |
| Tel: +44 (0)20 7710 7600 | Arie Kravtchin, Equity Capital Markets |
| Tel: +7 495 783 5691 |
Save where the context otherwise requires capitalised terms used in this announcement have the meanings set out in Appendix 2 to this announcement. All US$/ £ exchange rate references in this announcement assume an exchange rate of 61.4 pence/ per US$1.00.
Background to and reasons for the Placing
When Volga Gas was established in 2006, the Board's vision was to develop a substantial hydrocarbon resource with a particular emphasis on gas in a region of Russia that had the benefits of well developed infrastructure and proximity to consuming markets. A key part of this vision was the deep sub-salt potential that was indicated, but as yet unproven, in the Company's Karpenskiy licence area ("KLA"). Since then, the Group has added other exploration and development licences (Vostochny-Makarovskoye, Pre-Caspian and Urozhainoye-2) to its portfolio and has successfully established shallow oil production within the KLA.
As the Company announced during 2008, its ownership of the Vostochny-Makarovskoye ("VM") licence was the subject of threatened legal action. This action was subsequently withdrawn but led to a delay in the development of the VM field and to material legal expenses. The full details of this litigation are contained in announcements made by the Company on the Regulatory News Service on 28 August and 12 November 2008. In parallel with the resolution of the legal issues, the Company agreed with Trans Nafta, from whom the Company originally purchased its VM interest, to combine their respective gas processing assets to create a joint venture, of which the Company has a 75 per cent. share, that would serve both the VM field and Trans Nafta's nearby Dobrinskoye field. As a result of this settlement, the Company made a prepayment of RUR 600 million (approximately US$22 million at prevailing exchange rates) in November 2008 for the Company's share of the costs of the gas processing unit which will be jointly owned by the Company and Trans Nafta.
The final operational framework for the joint venture and the legal transfer of the gas processing unit assets to the joint venture have yet to be concluded. Legal completion is conditional, inter alia, on the plant being formally commissioned by 30 September 2009. Should this not be achieved within that timeframe, the Company has the right to unwind the joint venture and to seek recovery of its RUR 600 million pre-payment with accrued interest. Should these circumstances arise, it would be necessary to construct alternative processing facilities and pipeline access for the VM field which would result in further delays in initial production.
Prior to the emergence of these legal issues, the Company had significantly advanced the deep sub-salt exploration project. 267 km2 of 3-D seismic data was acquired by the Company during 2007 and processed and interpreted in 2008 resulting in 393 mmboe of C3 resources being identified. The location had been selected for the first deep exploration well in the KLA on the Yuzhny Ershovskoye prospect and a rig with the necessary specifications was mobilised onto the drilling location. Due to the uncertainty arising from the above legal action, the Company secured the agreement of the rig contractor to place the rig temporarily on standby. The Company will have to decide by 1 September 2009 whether to release the rig or to instruct the contractor and other service providers to commence drilling the deep well.
At the end of 2008, the Company's net cash position was US$23.1 million, with no debt. As previously announced to Shareholders, the drilling of the deep well will require the Company to secure additional funds.
The Directors have carefully considered the various options available to the Company, including releasing the rig, and have concluded that, given the significant mobilisation costs already incurred, the uncertainty of securing another suitable rig in the future, the competitive drilling rates secured and the importance of the deep exploration project to the Company's development, it is in the best interests of Shareholders to raise additional funds at this time and to proceed with the drilling during 2009.
Given the nature of the undertaking, i.e. the drilling of an exploration well, and the current relatively early stage of the Company's development, the Board considers it appropriate for the Company to raise finance through an issue of Placing Shares.
While the drilling of this sub-salt exploration well is a key strategic activity of the Company as set out in the Company's AIM admission document in 2007, it remains an undertaking with significant geological, technical and operational risks. There is no certainty that commercial quantities of hydrocarbons will be discovered as a result of drilling the well.
Use of Proceeds
The primary use of the net proceeds of the Placing will be to fund the forward costs of the Grafovskoye # 1 sub-salt well on the Yuzhny Ershovskoye field in the KLA. This well has a budgeted cost of US$18.7 million, excluding costs incurred to date. Given that it is a deep well with technically challenging drilling, the Board considers it prudent to have additional funds in place to cover the risk of cost over-runs. Should the well be drilled within budget, which is the Board's aspiration, the remaining funds will be applied towards bringing forward exploration and development projects within the Group's existing licence areas, including:
Medium depth exploration in the Yuzhny Mokrousovskoye area of the KLA (see below)
Pre-Caspian licence area where there is further major sub-salt exploration potential
Urozhainoye-2 licence which contains an existing oil discovery
The Group's existing cash reserves are expected to be sufficient to cover the other planned capital expenditure, working capital and provide headroom for additional investment.
Current trading and operational update
Full time production commenced late in 2008 from the shallow Uzenskaya field in the KLA. In the first five months of 2009, production has averaged 953 barrels of oil per day with the oil being sold into the domestic market directly from the field processing plant. Average net wellhead sales prices were US$15.30 per barrel (exclusive of VAT). With very low operating costs, this production is currently generating sufficient cash flow to cover the Group's running costs.
Since the start of 2009, the Company has completed two producing wells (Uz # 4 and Uz # 5) on Uzenskaya. The Group intends to drill at least two further production wells on the same field later in 2009. Meanwhile, the Uz # 7 well on a separate structure 7km to the east of Uzenskaya has discovered a thin productive oil zone in a secondary target, the primary objective having been found to be water bearing. This will be subject to further technical evaluation, possibly including 3-D seismic, before appraisal drilling.
Elsewhere in the KLA, interpretation of 3-D seismic data over the deep Yuzhny Mokrousovskoye prospect has identified a potentially significant structure at a depth of approximately 2000 metres. This appears to be a potentially oil bearing prospect.
On VM, the two initial wells VM # 1 and VM # 2 have been connected to the gas processing unit. Construction of the gas processing unit is in the final stages. Subject to successful commissioning, the VM field is ready to start production.
Details of the Placing
The Company is proposing to raise US$27 million (before expenses) (approximately US$26.6 million/ £16.3 million net of expenses) in a conditional placing of 27,000,000 Placing Shares at a price of US$1.00 or 61.4 pence per share. Investors can opt to pay for Placing Shares in either US dollars or pounds sterling. The Placing Shares (if subscribed for in full) will, on issue, represent approximately 33.3 per cent. of the Enlarged Share Capital.
The Placing Price represents a discount of 9.3 per cent. to the average middle market closing quotation of the Ordinary Shares for the five business days up to and including 17 June 2009 and a discount of 15.9 per cent. to the closing middle market quotation of the Ordinary Shares on 17 June 2009, the latest date prior to this announcement.
The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated bookbuilding process to be carried out by the Joint Bookrunners. Existing Shareholders who are Permitted Persons can place orders into their usual sales contacts at the Joint Bookrunners. The Bookbuilding will close at 4.00 pm. on 19 June 2009.
The Company yesterday entered into the Placing Agreement with the Joint Bookrunners. Under the terms of the Placing Agreement, the Joint Bookrunners have agreed, conditional inter alia upon the passing of the Resolution and upon Admission taking place before 8.00 a.m. on 7 July 2009 (or such later time and date as the Company and the Joint Bookrunners may agree not being later than 31 July 2009) to use its reasonable endeavours to procure placees to subscribe for the Placing Shares at the Placing Price and to assist the Company with the Admission of the Placing Shares. The Placing is conditional on the Placing Agreement not having been terminated in accordance with its terms. The Company is to pay all costs, charges and expenses of or incidental to the Placing.
Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that, conditional upon the passing of the Resolution at the General Meeting and on the Placing Agreement otherwise becoming wholly unconditional and not being terminated in accordance with its terms, dealings in the Placing Shares will commence on 7 July 2009. The Placing Shares will, when issued, rank pari passu with the Existing Ordinary Shares and will rank in full for dividends and other distributions declared, made or paid on or after Admission in respect of the ordinary share capital of the Company. Immediately upon Admission, the Company will have 81,017,800 Ordinary Shares in issue.
Appendix 1 to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing and the Bookbuilding.
Baring Vostok Private Equity Fund IV participation in the Placing
In order to support the Placing, Baring Vostok Private Equity Fund IV has undertaken to subscribe for up to 27,000,000 Placing Shares (the "BVPEF IV Placing Commitment") on the basis that the BVPEF IV Placing Commitment will be reduced if and to the extent that the Joint Bookrunners and the Company find other subscribers for Placing Shares (the "Other Subscribers"); and (ii) the Other Subscribers make due settlement for their Placing Shares in accordance with the terms and conditions of this announcement (see Appendix 1), provided that in no event shall Baring Vostok Private Equity Fund IV be allocated, and subscribe for, fewer than 14,804,100 Placing Shares (the "Minimum BVPEF IV Placing Commitment"). The BVPEF IV Placing Commitment is conditional on the Placing Agreement having been entered into and having become unconditional in all respects and not having been terminated in accordance with its terms.
Baring Vostok Private Equity Fund IV's investment adviser is BVCP. BVCP is also investment adviser to Baring Vostok Private Equity Fund III, the Company's majority beneficial Shareholder, which holds 54.8 per cent. of the Existing Ordinary Shares at the date of this announcement.
If no Other Subscribers are found to participate in the Placing then, following Admission, Baring Vostok Private Equity Fund III and Baring Vostok Private Equity Fund IV (together, "Baring Vostok") would, together, hold Ordinary Shares representing approximately 69.9 per cent. of the Enlarged Share Capital of the Company. If Baring Vostok Private Equity Fund IV subscribes only for the Minimum BVPEF IV Placing Commitment, then, following Admission, Baring Vostok would hold Ordinary Shares representing 54.8 per cent. of the Enlarged Share Capital of the Company.
Related Party Transaction
BVCP is a related party under the AIM Rules, Alexey Kalinin and Michael Calvey, its two co-managing partners, are Directors of the Company, Baring Vostok Private Equity Fund IV's participation in the Placing is therefore a related party transaction for the purposes of the AIM Rules. Accordingly, the Directors (other than Messrs Kalinin and Calvey), having consulted with Oriel Securities (in its capacity as the Company's nominated adviser under the AIM Rules), confirm that they are satisfied that the terms of Baring Vostok Private Equity Fund IV's participation in the Placing are fair and reasonable insofar as the Shareholders are concerned. In being consulted, Oriel Securities has relied on the Directors' commercial assessment of the transaction.
Director participation in the fundraising
Mikhail Ivanov (Chief Executive Officer), Tony Alves (Chief Financial Officer), Ron Freeman (a non-executive Director) and Stephen Ogden (a non-executive Director), have undertaken to participate in the fundraising taking up to 433,350 Placing Shares between them.
Changes in Directors' shareholdings
Following the Placing, the resulting shareholdings of those directors of the Company who have subscribed for Placing Shares are set out below:
| Director | Holding of Ordinary Shares pre-Admission | Placing Shares subscribed for in Placing | Holding of Ordinary Shares on Admission | Percentage holding of the issued share capital prior to Admission | Percentage of the enlarged issued share capital on Admission |
| Mikhail Ivanov | 575,100* | 258,350 | 833,450 | 1.06% | 1.03% |
| Tony Alves | - | 25,000 | 25,000 | - | 0.03% |
| Ron Freeman | 5,000 | 50,000 | 55,000 | 0.01% | 0.07% |
| Stephen Ogden | 15,000 | 100,000 | 115,000 | 0.03% | 0.21% |
* This figure includes 50,000 Ordinary Shares Mr Ivanov has agreed to acquire from Vlarenhill Limited. This transaction, which was announced by the Company on 14 May 2009, has not yet completed.
Reasons to disapply pre-emption rights
The Directors (other than Messrs Kalinin and Calvey) have considered the most appropriate method to conduct the fundraising. This included consideration of a placing and open offer or rights issue. The time and costs associated with a pre-emptive offer resulting from the introduction of the EU Prospectus Rules (which came into force in July 2005) are considered by the Directors to be excessive given the size of the fundraising. The making of a pre-emptive offer would require the production of a prospectus which would have to comply with the FSA's Prospectus Rules and be pre-vetted and approved by the FSA. After careful consideration the Directors (other than Messrs Kalinin and Calvey) concluded that the benefit of minimising the costs of the fundraising by way of a non pre-emptive cash placing would be in the Company's and Shareholders' best interests.
The Company does not currently have in place sufficient existing authorities to enable the allotment of equity securities for cash on a non pre-emptive basis sufficient for the purposes of the Placing. Accordingly, the Company is seeking Shareholders' approval (pursuant to the Resolution) to dis-apply pre-emption rights at the General Meeting to the extent required to facilitate the Placing.
This will allow the Directors to allot the Placing Shares. This power will be in addition to any previous authorities and powers given to the Directors and shall expire at the conclusion of the 2010 annual general meeting of the Company.
Undertakings
The Company has received irrevocable undertakings to vote in favour of the Resolution from the Directors holding (directly or indirectly) in aggregate 1,411,650 Ordinary Shares representing 2.6 per cent. of the Existing Ordinary Shares.
General Meeting
The Company intends to post a circular to Shareholders, containing a notice of General Meeting of the Company to be held at the offices of Akin Gump LLP at Eighth Floor, Ten Bishops Square, London E1 6EG at 10.00 a.m. on 6 July 2009. A form of proxy to be used by Shareholders in connection with the General Meeting will also be enclosed.
At the General Meeting the Resolution will be proposed as a special resolution to disapply statutory pre-emption rights in respect of the allotment of the Placing Shares for cash.
Baring Vostok Private Equity Fund III will not vote on the Resolution in accordance with the terms of the relationship agreement entered into on 20 April 2007 between the Company, Baring Vostok Private Equity Fund III and Cavendish Nominees Limited.
Placing Statistics and Timetable
| Placing Price | US$1.00 or 61.4 pence |
| Number of Ordinary Shares currently in issue | 54,017,800 |
| Number of Placing Shares to be issued | 27,000,000 |
| Number of Ordinary Shares in issue following the Placing | 81,017,800 |
| Number of Placing Shares as a percentage of the Enlarged Share Capital | 33.3 per cent. |
| Approximate proceeds of the Placing (net of Placing expenses) | US$26.6 million(£16.3 million) |
| General Meeting | 6 July 2009 |
| Admission and commencement of dealings in the Placing Shares | 7 July 2009 |
Oriel Securities Limited ("Oriel"), which is authorised and regulated in the United Kingdom by the Financial Services Authority (the "FSA"), is acting as Nominated Adviser and broker to the Company for the purposes of the AIM Rules for Companies and the AIM Rules for Nominated Advisers in connection with the Placing and Admission and is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to customers of Oriel or for advising any other person on any transaction or arrangement referred to in this announcement.
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, such securities by any person in any circumstances, and in any jurisdiction, in which such offer or solicitation is unlawful. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any person from or residing in a Restricted Jurisdiction and any person receiving this announcement (including, without limitation, custodians, nominees and trustees) must not distribute or send it in or into or from any Restricted Jurisdiction.
APPENDIX 1
TERMS AND CONDITIONS OF THE PLACING
FOR INVITED PLACEES ONLY - IMPORTANT INFORMATION
1. Eligible participants
This Appendix 1, including the terms and conditions of the Placing set out in this Appendix 1, is directed only at persons that have been invited to participate in the Placing and who are (i) persons ("FSMA Qualified Investors") who are "qualified investors" as defined in section 86(7) of the Financial Services and Markets Act 2000 ("FSMA"), being a person falling within Article 2.1(e)(i), (ii) or (iii) of Directive 2003/71/EC (known as the "Prospectus Directive") and/or persons at or to whom any private communication relating to the Company that is a "financial promotion" (as such term is used in relation to FSMA) may lawfully be issued, directed or otherwise communicated without the need for it to be approved, made or directed by an "authorised person" as defined in FSMA, being to persons falling within Article 19 (investment professionals), Article 43 (members and creditors of certain bodies corporate) and Article 49 (high net-worth entities) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI. 2005/No. 1529) made pursuant to section 21(5) of FSMA (the "Order") or (ii) other persons to whom it may otherwise lawfully be issued or passed on to without requiring any additional prospectus, offer document, filing or any other action. This Appendix 1 is exempt from the general restriction in section 21 of FSMA on the communication of invitations or inducements to enter into investment activity on the grounds that it is communicated only to persons who fall within Articles 19, 43 or 49 of the Order (all such persons together being referred to as "Permitted Persons"). This announcement has not been approved by an authorised person. Any investment to which this announcement relates is available to (and any investment activity to which it relates will be engaged with) only those persons falling within Articles 19, 43 and 49 of the Order. Persons who do not fall within such categories of investor should not rely or take any action upon this announcement. Any person who is in any doubt about the investment to which this announcement relates should consult an authorised person specialising in advising on investments of the kind referred to in this announcement.
For persons resident in Sweden, additional limitations apply in order to be an eligible participant. As regards persons resident in Sweden, this Appendix 1, including the terms and conditions of the Placing set out in this Appendix 1, is directed only at persons that have been invited to participate in the Placing and who are persons who are "qualified investors" as defined in Article 2.1(e) in the Prospectus Directive.
This announcement does not constitute an offer to the public in Finland. The Placing Shares cannot be offered or sold in Finland by means of any document to any person other than (i) "Qualified Investors" as defined by the Finnish Securities Markets Act (Arvopaperimarkkinalaki, 26.5.1989/495, as amended), or (ii) persons who will commit to invest in the shares at least EUR 50,000 per investor for each separate offer. No action has been taken to authorise an offering of the Placing Shares to the public in Finland and the distribution of this announcement is not authorised by the Financial Supervisory Authority in Finland. This announcement is strictly for private use by its holder and may not be passed on to third parties or otherwise publicly distributed. Subscriptions will not be accepted from any persons other than the person to whom this announcement has been delivered by the Company or its representative. This announcement may not include all the information that is required to be included in a prospectus in connection with an offering to the public.
In this Appendix 1 "Placee" means any person who becomes committed to acquire Placing Shares under the Placing having given oral agreement to do so in accordance with the terms and conditions of this Appendix 1 to the Joint Bookrunners.
Members of the public are not eligible to take part in the Placing and will not be considered Permitted Persons. The Bookbuilding (as defined below at paragraph 4) is only open to existing shareholders of the Company.
2. Overseas jurisdictions
The distribution of this announcement and/or issue of Placing Shares pursuant to the Placing or otherwise in certain jurisdictions outside the United Kingdom may be restricted by law. Persons who seek to participate in the Placing must inform themselves about and observe any such restrictions. In particular, this announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in the United States, Canada, Australia, Japan, South Africa, New Zealand or the Republic of Ireland or any other jurisdiction in which such offer or solicitation, publication or distribution is or would be unlawful. Persons receiving the announcement including this Appendix 1 (including, without limitation, custodians, nominees and trustees) must not distribute, mail or send it in, into or from the United States, or use the United States mails, directly or indirectly, in connection with the Placing, and by so doing may invalidate any related purported application for Placing Shares.
The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended ("US Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and, subject to certain exceptions, may not be offered or sold, resold or delivered, directly or indirectly in or into the United States, or to, or for the account or benefit of, any US persons (as defined in Regulation S under the US Securities Act). No public offering of the Placing Shares is being made in the United States. No money, securities or other consideration from any person inside the United States is being solicited pursuant to this announcement or the Placing.
3. Placing
The Joint Bookrunners are arranging the Placing as agent for and on behalf of the Company. Oriel and the Company will determine in their absolute discretion the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee. No commissions will be paid to or by Placees in respect of their agreement to acquire any Placing Shares.
Each Placee will be required to pay to the Joint Bookrunners, on the Company's behalf, the Placing Price for each Placing Share agreed to be acquired by it under the Placing in accordance with the terms set out in this Appendix 1. Each Placee's obligation to acquire and pay for Placing Shares under the Placing will be owed to each of the Joint Bookrunners and the Company. Each Placee has an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for. Each Placee will be deemed to have read and understood this Appendix 1 in its entirety, to be participating in the Placing upon the terms and conditions contained in this Appendix 1, and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in this Appendix 1. To the fullest extent permitted by law and applicable FSA rules (the "FSA Rules"), neither (i) the Joint Bookrunners, (ii) any director, officer, employee or consultant of the Joint Bookrunners, or (iii) to the extent not contained within (i) or (ii), any person connected with the Joint Bookrunners as defined in the FSA Rules ((i), (ii) and (iii) being together "Affiliates" and individually an "Affiliate"), shall have any liability to Placees or to any person other than the Company in respect of the Placing.
4. Participation, bookbuilding and settlement
Participation in the Placing is only available to persons who may lawfully be, and are, invited to participate in it by the Joint Bookrunners.
The Joint Bookrunners are conducting an accelerated bookbuilding process to determine the demand for participation in the Placing at the Placing Price (the "Bookbuilding"). An institution that is a Permitted Person and a shareholder and that wishes to participate should communicate its bid by telephone to its usual sales contact at the Joint Bookrunners. Oriel and the Company will determine in their absolute discretion the extent of each Placee's participation in the Placing. If successful, an allocation will be confirmed orally following the close of the Bookbuilding, and a conditional Contract Note will be dispatched as soon as possible thereafter. the Joint Bookrunners' oral confirmation will constitute a legally binding commitment upon the Permitted Person to subscribe for the number of Placing Shares allocated to that Permitted Person at the Placing Price and otherwise on the terms and conditions set out in this Appendix 1 and in accordance with the Company's memorandum and articles of association. Each Placee's obligations will be owed to the Company and the Joint Bookrunners. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners to pay to the Joint Bookrunners (or as the Joint Bookrunners may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee is allocated.
The Company will make a further announcement following the close of the Bookbuilding.
Principal Terms of the Bookbuilding:
(a) The Joint Bookrunners are arranging the Placing as agent for the Company;
(b) Participation will only be available to Permitted Persons who are shareholders in the Company and who are invited to participate by the Joint Bookrunners and who communicate their wish to participate in the Bookbuilding to the Joint Bookrunners in accordance with sub-paragraph (d) below and who are able to participate in accordance with the terms and conditions set out herein. Oriel may enter bids and participate as principal in the Bookbuilding with the prior agreement of the Company;
(c) The Placing Price will be US$1.00 or 61.4 pence per share;
(d) An institution that is a Permitted Person and that wishes to participate in the Bookbuilding should communicate its bid by telephone to its usual sales contact at the Joint Bookrunners. The bid should state the number of Placing Shares, whether the institution wants to subscribe in US$ or £ and/or the monetary amount which the institution wishes to subscribe for at the Placing Price;
(e) Any bid will be made on the terms and conditions in this Appendix 1 and will not be capable of variation or revocation after the close of the Bookbuilding process;
(f) The Joint Bookrunners reserve the right not to accept bids or to accept bids in part rather than in whole. The acceptance of bids shall be at the absolute discretion of the Joint Bookrunners and the Company; and
(g) The Bookbuilding process is expected to close no later than 4.00 p.m. (London time) on 19 June 2009, but may be closed earlier or later at the discretion of the Joint Bookrunners and the Company. The Joint Bookrunners and the Company jointly may, in their sole discretion, accept bids that are received after the Bookbuilding has closed. Notwithstanding the provisions of this paragraph 4 the Company and the Joint Bookrunners will be entitled to effect the Placing by such alternative method to the Bookbuilding as they may, in their absolute discretion, determine.
All obligations under the Placing will be subject to fulfilment of the conditions referred to below under 'Placing conditions'.
A Placee's commitment to acquire a fixed number of Placing Shares under the Placing will be agreed orally with the Joint Bookrunners. Such agreement will constitute a legally binding commitment on such Placee's part to acquire that number of Placing Shares at the Placing Price on the terms and conditions set out or referred to in this Appendix 1 and subject to the Company's Memorandum and Articles of Association.
After such agreement is entered into, a written confirmation will be dispatched to the Placee by the Joint Bookrunners confirming (i) the number of Placing Shares that such Placee has agreed to acquire, (ii) the aggregate amount such Placee will be required to pay for those Placing Shares and (iii) settlement instructions. It is expected that such written confirmations will be despatched by the date on which this announcement is published and that the "trade date" for settlement purposes will be 2 July 2009 and the "settlement date" will be 7 July 2009.
Settlement of transactions in the Placing Shares (ISIN: GB00BIVN4809; SEDOL: BIVN480) will take place within the CREST system, subject to certain exceptions, on a delivery versus payment ("DVP") basis. Placees being settled through Oriel should settle against CREST ID: 601, placees being settled through Renaissance Capital should settle against CREST ID: OHMAY. The Joint Bookrunners reserve the right to require settlement for and delivery of any Placing Shares to any Placees by such other means that it deems appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Appendix 1 or would not be consistent with the regulatory requirements in any Placee's jurisdiction. A Placee whose Placing Shares are to be delivered to a custodian or settlement agent should ensure that the written confirmation is copied and delivered immediately to the appropriate person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. No Placee (or any nominee or other agent acting on behalf of a Placee) will be entitled to receive any fee or commission in connection with the Placing.
No UK stamp duty or stamp duty reserve tax should be payable to the extent that the Placing Shares are issued into CREST to, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee provided that the Placing Shares are not issued to a person whose business is or includes issuing depositary receipts or the provision of clearance services or to an agent or nominee for any such person.
Any arrangements to issue or transfer the Placing Shares into a depositary receipts system or a clearance service or to hold the Placing Shares as agent or nominee of a person to whom a depositary receipt may be issued or who will hold the Placing Shares in a clearance service, or any arrangements subsequently to transfer the Placing Shares, may give rise to UK stamp duty and/or stamp duty reserve tax, for which neither the Company nor the Joint Bookrunners will be responsible and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that any of the Company and/ or the Joint Bookrunners have incurred any such liability to UK stamp duty or stamp duty reserve tax. In addition, Placees should note that they will be liable to pay any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them for any Placing Shares or the agreement by them to subscribe for any Placing Shares.
When a Placee or person acting on behalf of the Placee is dealing with the Joint Bookrunners, any money held in an account with the Joint Bookrunners on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the FSA Rules. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Joint Bookrunners' money in accordance with the client money rules and will be used by the Joint Bookrunners in the course of its own business; and the Placee will rank only as a general creditor of the Joint Bookrunners.
5. No prospectus
No prospectus has been or will be submitted for approval by the FSA in relation to the Placing or the Placing Shares. Placees' commitments in respect of Placing Shares will be made solely on the basis of the information contained in this announcement and on the terms contained in it. Each Placee, by accepting a participation in the Placing, undertakes that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of the Joint Bookrunners or the Company and neither the Company nor the Joint Bookrunners will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on this announcement and its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
6. Placing Shares
The Placing Shares will, when issued, be fully paid and will be issued subject to the Company's Memorandum and Articles of Association and will rank pari passu in all respects with the existing Ordinary Shares in issue on Admission. Application will be made for the admission of the Placing Shares to trading on AIM. It is expected that Admission will take place, and dealings in the Placing Shares will commence, on 7 July 2009.
7. Placing Agreement
The Joint Bookrunners have agreed, on the terms and subject to the conditions set out in the placing agreement dated 18 June 2009 and made between the Company and the Joint Bookrunners (the "Placing Agreement"), to use its reasonable endeavours as agent of the Company to procure persons to acquire all of the Placing Shares at the Placing Price. The Placing has not been underwritten by the Joint Bookrunners.
8. Placing conditions
The Placing is conditional, inter alia, on (i) the Placing Agreement not being terminated in accordance with its terms, (ii) Admission taking place not later than 8.00 a.m. on 7 July 2009, and (iii) the Placing Agreement becoming unconditional in all other respects.
The Joint Bookrunners reserve the right (with the agreement of the Company) to waive or extend the time and/or date for the fulfilment of any of the conditions in the Placing Agreement to a time no later than 8.00 a.m. on 31 July 2009 (the "Long Stop Date").
If any condition in the Placing Agreement is not fulfilled or waived by the Joint Bookrunners by the relevant time, the Placing will lapse and each Placee's rights and obligations pursuant to the Placing shall cease and terminate at such time.
The Placing Agreement may be terminated by the Joint Bookrunners at any time prior to Admission in certain circumstances including, inter alia, following a material breach of the Placing Agreement or the warranties by the Company or the occurrence of certain force majeure events. The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by the Joint Bookrunners whether or not to extend the time for satisfaction of any condition in the Placing Agreement or otherwise in respect of the Placing shall be within the Joint Bookrunners' absolute discretion. The Joint Bookrunners shall have no liability to any Placee in the event of any such termination, waiver or extension or in respect of any decision whether to exercise any such right of termination, waiver or extension. The Company will inform each Placee if the Joint Bookrunners' obligations under the Placing Agreement do not become unconditional by 8.00 a.m. on 7 July 2009, or such later time and date as the Joint Bookrunners may in their absolute discretion determine (being no later than 8am on the Long Stop Date).
9. Payment default
A Placee's entitlement to receive any Placing Shares will be conditional on the Joint Bookrunners' receipt of payment from the relevant Placee by the relevant time to be stated in the written confirmation referred to above, or by such later time and date as the Joint Bookrunners may in their absolute discretion determine. The Joint Bookrunners may, in their absolute discretion, waive such condition, and shall not be liable to any Placee in the event of it deciding whether to waive or not to waive such condition.
If any Placee fails to make such payment by the required time for any Placing Shares (1) the Company may release itself (if it decides in its absolute discretion to do so) and will be released from all obligations it may have to allot and/or issue any such Placing Shares to such Placee or at its direction which are then unallotted and/or unissued, (2) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any such Placing Shares to the fullest extent permitted under its articles of association or otherwise by law and to the extent that such Placee then has any interest in or rights in respect of any such shares, (3) the Company or, as applicable, the Joint Bookrunners may sell (and each of them is irrevocably authorised by such Placee to do so) all or any of such shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of the Company or, where applicable, the Joint Bookrunners (i) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares, (ii) any amount required to cover any stamp duty or stamp duty reserve tax arising on the sale, and (iii) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale, and (4) such Placee shall remain liable to the Company and to the Joint Bookrunners for the full amount of any losses and of any costs which it may suffer or incur as a result of it (i) not receiving payment in full for such Placing Shares by the required time, and/or (ii) the sale of any such Placing Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it. Interest may be charged in respect of payments not received by the Joint Bookrunners for value by the required time referred to above at the rate of two percentage points above the current Bank Rate of the Bank of England.
10. Placees' warranties and undertakings to the Company and the Joint Bookrunners
By orally agreeing with Oriel to acquire Placing Shares under the Placing, a Placee irrevocably warrants and undertakes to each of the Company and the Joint Bookrunners, on behalf of itself and each company in its Group (if any) ("Group" meaning in relation to a company, that company, any company of which it is a subsidiary (having the meaning set out in section 1159 of the Companies Act 2006 as amended) (its holding company) and any other subsidiary of such holding company), in each case as a fundamental term of such Placee's application for Placing Shares and of the Company's obligation to allot and/or issue any Placing Shares to it or at its direction, that:
(a) it agrees to and accepts all of the terms set out in this Appendix 1 and that is has the power and authority to subscribe for the Placing Shares and to give all confirmations and to execute and deliver all documents necessary to effect such subscription;
(b) its rights and obligations in respect of the Placing will terminate only in the circumstances described in this Appendix 1 and will not be capable of rescission or termination by it in any other circumstances;
(c) the contents of this announcement, which has been issued by the Company, are the responsibility of the Company and of those persons who are stated in it as having accepted responsibility for such contents, and of no other persons;
(d) it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of the Company or the Joint Bookrunners and neither the Company nor the Joint Bookrunners will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement, other than as contained in this announcement (for which the only person(s) responsible to it is or are the person(s) stated in this announcement as having accepted responsibility for such information, representation, warranty or statement);
(e) it has relied on this announcement and its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing;
(f) it is not a customer of the Joint Bookrunners in relation to the Placing, but rather a corporate finance contact. The Joint Bookrunners are not acting for it in connection with the Placing and will not be responsible to it in respect of the Placing for providing protections afforded to its customers or for advising it on the Placing;
(g) neither it nor any company in its Group has been, and will not be, given any warranty or representation by the Company, the Joint Bookrunners or by any Affiliate of either of them in relation to any Placing Shares;
(h) it will pay the full amount at the Placing Price as and when required in respect of all Placing Shares allocated to it in accordance with such terms and will do all things necessary on its part to ensure that payment for such shares and their delivery to it or at its direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that it has in place with the Joint Bookrunners or puts in place with the Joint Bookrunners with its agreement;
(i) it is entitled to acquire Placing Shares under the laws of all relevant jurisdictions which apply to it and it has complied, and will fully comply, with all such laws (including where applicable, the Terrorism Act 2000, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002, and the Money Laundering Regulations 2007, each as amended from time to time) and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such acquisition, and it will provide promptly to the Joint Bookrunners such evidence, if any, as to the identity or location or legal status of any person which the Joint Bookrunners may request from it in connection with the Placing (for the purpose of complying with any such laws or regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Joint Bookrunners on the basis that any failure by it to do so may result in the number of Placing Shares that are to be allotted and/or issued to it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Joint Bookrunners may decide at their sole discretion;
(j) it has complied and will comply with all applicable provisions of FSMA with respect to anything done or to be done by it in relation to any Placing Shares in, from or otherwise involving the United Kingdom and it has not made or communicated or caused to be made or communicated, and it will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to Placing Shares in contravention of section 21 of FSMA;
(k) it is a FSMA Qualified Investor or it is otherwise a person at or to whom any private communication relating to the Company that is a "financial promotion" (as such term is used in relation to FSMA) may lawfully be issued, directed or otherwise communicated, otherwise than by an authorised person, without contravening the restriction in section 21 of FSMA.
(l) it is acting as principal only in respect of the Placing or, if it is acting for any other person in respect of the Placing (1) it is duly authorised to do so, (2) it is and remains liable to the Company and/or the Joint Bookrunners for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (3) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of the Prospectus Directive acting as agent for such person, and (4) such person is either (i) a FSMA Qualified Investor or (ii) its "client" (as defined in section 86(2) of FSMA) that has engaged it to act as his agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;
(m) nothing has been done or will be done by it in relation to the Placing or to any Placing Shares that has resulted or will result in any person being required to publish a prospectus in relation to the Company or to any Ordinary Shares in accordance with FSMA or the United Kingdom prospectus rules or in accordance with any other laws applicable in any part of the European Union or the European Economic Area;
(n) it is not, and is not acting in relation to the Placing as nominee or agent for, a person who is or may be liable to stamp duty or stamp duty reserve tax in respect of any agreement to acquire (or any acquisition of) shares or other securities at a rate in excess of 0.5 per cent. (including, without limitation, under sections 67, 70, 93 or 96 of the Finance Act 1986 concerning depositary receipts and clearance services), and the allocation, allotment, issue and/or delivery to it, or any person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any such section;
(o) it will not treat any Placing Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of its participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Company or the Joint Bookrunners to contravene any such legislation in any respect;
(p) it acknowledges and understands that none of the Placing Shares has been or will be registered under the US Securities Act; none of the Placing Shares may be offered or sold, directly or indirectly, into the United States or to, or for the account or benefit of, any US person (as such term is defined in Regulation S) except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the US Securities Act;
(q) Oriel may (in its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any other Affiliate or any person associated with any Affiliate to do so;
(r) time is of the essence as regards its obligations under this Appendix 1;
(s) this Appendix 1 and any contract which may be entered into between it and the Joint Bookrunners and/or the Company pursuant to it or the Placing, and all disputes or claims arising out of or in connection with either this Appendix 1 or any such contract (including any non-contractual obligation arising in connection with the same) shall be governed by and construed in accordance with the laws of England, for which purpose it submits to the exclusive jurisdiction of the courts of England and Wales as regards any claim, dispute, or matter arising out of or relating to this Appendix 1 or such contract, except that each of the Company and the Joint Bookrunners shall have the right to bring enforcement proceedings in respect of any judgement obtained against such Placee in the courts of England and Wales in the courts of any other relevant jurisdiction;
(t) each right or remedy of the Company or the Joint Bookrunners provided for in this Appendix 1 is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part shall not preclude the subsequent exercise of any such right or remedy;
(u) any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Joint Bookrunners;
(v) nothing in this Appendix 1 shall exclude any liability of any person for fraud on its part;
(w) all times and dates in this Appendix 1 are subject to amendment at the discretion of the Joint Bookrunners except that in no circumstances will the date scheduled for Admission be later than the Long Stop Date;
(x) none of its rights or obligations in respect of the Placing is conditional on any other person agreeing to acquire any Placing Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing shall affect any of its obligations in respect of the Placing;
(y) it has acknowledged the contents of paragraph 2 of this Appendix 1 and that it, or the beneficial owner, as applicable, is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it, or the beneficial owner, as applicable, and that it has fully observed such laws and obtained all such governmental and other guarantees and other consents in either case which may be required thereunder and complied with all necessary formalities;
(z) it undertakes that the person who it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither the Joint Bookrunners nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and Oriel in respect of the same on the basis that the Placing Shares will be credited to the CREST stock account of Oriel (CREST ID: 601) or Renaissance Capital (CREST ID: OHMAY) who will hold them as nominee for the subscribers of such shares until settlement in accordance with its standing settlement instructions;
(aa) it acknowledges and understands that the Company, the Joint Bookrunners and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Oriel on its own behalf and on behalf of the Company and are irrevocable;
(ab) it acknowledges that neither the Joint Bookrunners, nor any of their Affiliates nor any person acting on behalf of the Joint Bookrunners or their Affiliates is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor the exercise or performance of any of the Joint Bookrunners' rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right; and
(ac) represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA.
The rights and remedies of the Company and the Joint Bookrunners under these terms and conditions are in addition to any rights or remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.
APPENDIX 2
DEFINITIONS
Unless the context otherwise requires, the following definitions apply in the main body of this announcement:
| "Admission" | the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies; |
| "AIM" | the AIM market operated by the London Stock Exchange; |
| "AIM Rules" | the rules published from time to time by London Stock Exchange relating to AIM comprising the "AIM Rules for Companies" and the "AIM Rules for Nominated Advisers"; |
| "Bookbuilding" | has the meaning set out in paragraph 4 of Appendix 1 of this announcement; |
| "BVCP" | Baring Vostok Capital Partners Limited; |
| "Baring Vostok Private Equity Fund III" | Baring Vostok Private Equity Fund III L.P.1, Baring Vostok Private Equity Fund III L.P.2, and Baring Vostok Fund III Co-Investment L.P.; |
| "Baring Vostok Private Equity Fund IV" | Baring Vostok Private Equity Fund IV, L.P., Baring Vostok Fund IV Co-investment, L.P.1 and Baring Vostok Fund IV Co-investment, L.P. 2; |
| "Board" or "Directors" | the board of Directors of the Company; |
| "Enlarged Share Capital" | the Company's issued share capital immediately after completion of the Placing; |
| "Existing Ordinary Shares" | the Ordinary Shares in issue at the date of this document; |
| "FSA" | the UK Financial Services Authority; |
| "FSMA" | the Financial Services and Markets Act 2000, as amended; |
| "General Meeting" | the general meeting of the Company which the Company intends to convene for 10.00 a.m. on 6 July 2009 (or any adjournment thereof); |
| "Group" | the Company together with its subsidiaries; |
| "Joint Bookrunners" | Oriel Securities and Renaissance Capital; |
| "London Stock Exchange" | London Stock Exchange plc; |
| "Ordinary Shares" | ordinary shares of 1p each in the capital of the Company; |
| "Oriel Securities" | Oriel Securities Limited; |
| "pence" | pence sterling; |
| "Permitted Persons" | has the meaning set out in paragraph 1 of Appendix 1 of this announcement; |
| "Placing" | the conditional placing by the Joint Bookrunners of the Placing Shares with investors at the Placing Price pursuant to the Placing Agreement; |
| "Placing Agreement" | the conditional agreement dated 18 June 2009 between the Company and the Joint Bookrunners relating to the Placing; |
| "Placing Price" | US$1.00 (61.4 pence) per new Ordinary Share; |
| "Placing Shares" | 27,000,000 new Ordinary Shares to be placed pursuant to the Placing; |
| "Resolution" | the special resolution to be proposed at the General Meeting as to be set out in the notice of General Meeting; |
| "RUR" | Russian Roubles; |
| "Shareholders" | holders of issued Ordinary Shares; |
| "UK" | United Kingdom of Great Britain and Northern Ireland; |
| "US$" | US dollar; |
| "United States" or "US" | the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction; |
| "Volga Gas" or "the Company" | Volga Gas plc; |
| "£" | pounds sterling. |