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26 | 01 | 2009
Korimos and Avtocard Acquisitions Completed
Sibir today announces that it has completed its acquisitions of two important downstream assets, a 50 per cent. stake in OAO Korimos (“Korimos”) and 100 per cent. of OAO Avtocard (“Avtocard”), for cash considerations of $65 million and $95 million respectively, as approved by shareholders at the General Meeting of the Company in London on December 18, 2008. The remaining $1.1 million of the total $160 million consideration due has now been paid.
Korimos is a 50/50 joint venture with the Moscow Refinery that utilises output from the Refinery’s catalytic cracker to produce primarily MTBE (Methyl Tertiary Butyl Ether) and TAME (Tertiary Amyl Methyl Ether), chemicals used in the oil refining process. In addition, Korimos owns six high-quality gasoline retail outlets in the Moscow region.
Avtocard is a specialist non-cash wholesale oil products seller with operations closely integrated with Sibir’s MTK retail network. The company’s revenues are derived from sales of oil products to state organizations and private businesses using smart cards and vouchers. Avtocard’s fleet-card provides over 50 per cent. of fuels sales volumes through the MTK retail network and is accepted at hundreds of competing outlets in Moscow and the Moscow region.
Sibir acquired the assets from Gradison Consultants Inc. (“Gradison”) and Orton Oil Company Limited (“Orton”), companies beneficially owned by Sibir shareholders Chalva Tchigirinsky and Igor Kesaev respectively.
Commenting on the announcement, Sibir CEO, Henry Cameron, said, “Sibir is pleased to have completed these acquisitions quickly following shareholder approval. The Company is committed to growing its profitable downstream business and the acquisition of Avtocard represents an important step in achieving this objective. Sibir has long believed that the Korimos assets belong under the operational control of Moscow Refinery, which is controlled in turn by Sibir and Gazpromneft, and we expect to announce very shortly the sale of Korimos to the Refinery, as indicated in the Company’s December circular to shareholders.”