At the Extraordinary General Meeting on May 24, 2007, it was decied to spin off Vostok Nafta's non-Gazprom portfolio to a new separate company, Vostok Nafta Holding Investment Ltd. In connection with this restructuring Vostok Nafta Investment Ltd changed its name to Vostok Gas Ltd, while the new company took over the name Vostok Nafta Investment Ltd. This three months report pertains to the new company and is also included in the prospectus regarding the restructuring which will be published on May 25, 2007.
- Net profit for the period was USD 3.41 million (57.62 for the corresponding period last year). Earnings per share was USD 0.07 (1.25).
- The net asset value of the company was USD 377.89 million on March 31, 2007 (385.38), corresponding to USD 8.21 per share (8.37). Given a SEK/USD exchange rate of 6.98 the corresponding values were SEK 2,638.59 million and SEK 57.33, respectively. The net asset value reported on a monthly basis will reflect the market value of the group's assets less its liabilities.
- The group's net asset value per share in USD decreased by 1.91 per cent over the period January 1, 2007–March 31, 2007. During the same period the Credit Suisse First Boston ROS-index decreased by 0.78 per cent in USD terms. The number of shares at the end of March 2007 was 46,020,901.
Previously Vostok Nafta Holding Investment Ltd.
Until the utilization of the subscription option and the new share issues, the Company only holds 1 share. The number of shares used for showing meaningful per share data for all periods has been the number of shares achieved at full accession. Related capital in connection with imminent new share issue has however not been taken into consideration.
Background
In order to highlight the value of the non-Gazprom-related holdings, offer more direct and transparent exposure to Old Vostok Nafta's portfolio of assets, and meet different investors' risk preferences, the shareholders in Old Vostok Nafta approved the board of directors' proposal for the Restructuring of the Company at an extraordinary General Meeting on May 24, 2007.
This Restructuring entails spinning off the non-Gazprom-related part of Old Vostok Nafta's portfolio into a new company, New Vostok Nafta. As a result of this Restructuring, Old Vostok Nafta changed name on May 24, 2007 to Vostok Gas.
New Vostok Nafta will continue to invest in accordance with previous strategies, with a clear and sustained focus on Russia and its neighbours. However, its mandate will be extended in terms of geographical areas and industrial sectors. The formation of New Vostok Nafta and the capital being injected into the Company in connection with the Restructuring will also provide a better basis for exploiting the investment opportunities to be found in Russia and the other CIS states.
The board of directors is of the opinion that the spin off will highlight the advantages of the non-Gazprom related investments and allow greater flexibility when it comes to the future management of these investments. New Vostok Nafta's advantages include:
– A proven track record in the region and a variety of sectors
– Opportunity for sharper focus on the portfolio
– Strong business flow as a result of corporate management and Old Vostok Nafta's brand
– More homogeneous risk/return profile
The accounts of the interim report have been prepared as if the division of the Vostok Nafta Investment Ltd Group was carried out on September 30, 2003, and comprises the consolidated accounts of the companies that will be included in the new Vostok Nafta Group; i.e. Vostok Komi (Cyprus) Ltd, Vostok Nafta Sverige AB, RusForest Ltd and RusForest (Cyprus) Ltd. The Restructuring of the Group further implies that items of the income statement and the balance sheet that relate to non-Gazprom assets, which formerly have been recognized in the accounts of other companies of the Old Vostok Nafta Group, are now included in the consolidated accounts of the New Vostok Nafta Group.
The transactions by which New Vostok Nafta Group acquires the companies mentioned above and the non-Gazprom related assets, which have been recognized in companies of the Old Vostok Nafta Group, comprises transactions between companies under joint control. These transactions are being recognized to the same values as they were in the selling company, in accordance with the so called predecessor accounting method.
The transferred income statement items, which were previously reported in companies within the Old Vostok Nafta Group, other than in those group companies now transferred in their entirety refer to non-Gazprom related realised and unrealised gains and losses from financial assets valued at fair value in the income statement, results from investments in associated companies, income from dividends with associated coupon tax, and administrative costs related to non-Gazprom related operations.
The transferred balance sheet items which were previously been reported in companies within the Old Vostok Nafta Group, other than in those group companies now transferred in their entirety refer to non-Gazprom related long-term and short- term financial assets valued at fair value in the income statement, investments in associated companies, unpaid share transactions and receivables from associated companies.
The transfer of these income statement items and assets has been made to shareholders' equity, i.e. as if the transfer of non-Gazprom related income statement items and assets to the New Vostok Nafta was carried out by way of a owners' contribution. For further information – See Note 1.
The financial year is January 1–December 31.
(For complete report see attached file)
