VGAS.L Regulatory News (VGAS)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.

7 April 2020

Volga Gas plc

("Volga Gas", or "the Company")

STRATEGIC REVIEW INCLUDING FORMAL SALE PROCESS UNDER THE TAKEOVER CODE

Volga Gas plc (LSE: VGAS), the oil and gas exploration and production group operating in the Volga Region of Russia, announces that its board of directors ("Board") has decided to conduct a formal review of the various strategic options available to the Company to maximise value for shareholders.

These options include, but are not limited to, the potential sale of the Company through the commencement of a "formal sale process" (as referred to in Note 2 on Rule 2.6 of the The City Code on Takeovers and Mergers (the "Takeover Code")) or the farm-out or sale of one or more of the Company's assets.

The Board has established a special committee comprised of its independent non-executive directors to oversee the strategic review.

Background to the strategic review

The Company was established in 2005 by Russian entrepreneurs and funds sponsored and advised by Baring Vostok Capital Partners Limited ("BVCPL") ("Baring Vostok Funds"), to consolidate oil and gas assets in the Volga Region. The Baring Vostok Funds are now advised by BVCPL's successor Baring Vostok Capital Partners Group Limited ("BVCPGL") and remain the majority shareholder of the Company. BVCPGL has indicated to the Company that these funds have moved from the investing stage to the harvesting stage of their life-cycle and that it would be desirable for the Company to explore ways for them to monetise their long term investment in a structured manner.

Formal Sale Process

One of the options that will be considered in the strategic review is a sale of the Company. The Takeover Panel has agreed that any discussions with third parties may be conducted within the context of a formal sale process under the Takeover Code to enable conversations with parties interested in making a proposal to take place on a confidential basis.

The Company is not in receipt of any approaches at the time of this announcement.

The Board has appointed Renaissance Capital - Financial Consultant Limited ("Renaissance Capital") as its financial adviser with regards to the strategic review and formal sale process and Auctus Advisors LLP ("Auctus") as independent financial adviser for the purposes of Rule 3 of the Takeover Code.

Parties with a potential interest in making a proposal should contact Renaissance Capital (contact details as set out below).

It is currently expected that any party interested in participating in the formal sale process will, at the appropriate time, enter into a non-disclosure agreement and standstill arrangement with Volga Gas on terms satisfactory to the Board of the Company. The Company then intends to provide such interested parties with certain information on the Group's business, following which interested parties shall be invited to submit their proposals to Renaissance Capital. It is the Board's current intention to complete the strategic review by the end of June 2020 and further announcements regarding timings for the formal sale process will be made when appropriate.

Shareholders are advised this is not a firm intention to make an offer under Rule 2.7 of the Takeover Code and there can be no certainty that any offers will be made as a result of the formal sale process, that any sale or other transaction will be concluded, nor as to the terms on which any offer or other transaction may be made.

The Board reserves the right to alter or terminate the process at any time and in such cases will make an announcement as appropriate. The Board also reserves the right to reject any approach or terminate discussions with any interested party at any time.

Publication on website and hard copies

A copy of this announcement and the documents required to be published by Rule 26 of the Takeover Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on the Company's website at http://www.volgagas.com by no later than 12 noon on the Business Day following the date of this announcement. For the avoidance of doubt, the content of the website is not incorporated into and does not form part of this announcement.

Rule 2.9 of the Takeover Code 

For the purposes of Rule 2.9 of the Takeover Code, Volga Gas confirms that it has in issue 80,818,452 ordinary shares of 1p each (other than shares held in treasury), each share having equal voting rights. The Company holds 199,348 shares in treasury.

The ISIN for the shares is GB00B1VN4809.

Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code 

The Panel on Takeovers and Mergers (the "Takeover Panel") has agreed that any discussions with third parties may be conducted within the context of a formal sale process. Accordingly, it has granted a dispensation from the requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Takeover Code such that any interested party participating in the formal sale process will not be required to be publicly identified under Rules 2.4(a) or 2.4(b) as a result of this announcement and any interested party participating in the formal sale process will not be subject to the 28-day deadline referred to in Rule 2.6(a) of the Takeover Code for so long as it is participating in the formal sale process.

Following this announcement, the Company is now considered to be in an "offer period" as defined in the Takeover Code, and the dealing disclosure requirements as set out below will apply.

For further information, please contact:

Additional information

Renaissance Capital - Financial Consultant Limited is an affiliate of Renaissance Capital Limited, which is authorised and regulated by the Financial Conduct Authority of the United Kingdom. Renaissance Capital is acting exclusively for Volga Gas in connection with the matters referred to in this announcement and will not be responsible to anyone other than Volga Gas for providing the protections afforded to clients of Renaissance Capital or for providing advice in connection with the contents of this announcement or any other matter referred to in this announcement.

Auctus Advisors LLP is an authorised representative of Tamesis Partners LLP, which is authorised and regulated by the Financial Conduct Authority of the United Kingdom. Auctus is acting exclusively for Volga Gas and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Volga Gas for providing the protections afforded to clients of Auctus or for providing advice in connection with the contents of this announcement or any other matter referred to in this announcement.

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Disclosure Requirements of the Takeovers Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.