Announces US$300m placing

RNS Number : 4441W
Zhaikmunai LP
29 July 2009




Zhaikmunai L.P. announces US$300m placing at US$4 per GDR 


London, 29th July 2009: Zhaikmunai L.P. (LSE:ZKM) ('Zhaikmunai'), the oil and gas exploration, development and production business based in northwestern Kazakhstan, today announces a placing to raise US$300 million through the sale of new common units (the 'Placing'), a major part of which will be in the form of global depositary receipts ('GDRs'). The proceeds of the Placing will supplement the Group's existing credit facilities and fund in part the capital expenditure programme for the Chinarevskoye field, in particular, the completion of the Gas Treatment Unit.  

In connection with the Placing, the Partnership has agreed to issue 45,000,000 new Common Units in the form of GDRs at a price of US$4.00 per GDR on a non-preemptive basis to placees procured by ING Bank, Mirabaud Securities, Renaissance Capital and FirstEnergy Capital Corp. pursuant to an underwritten placing agreement dated 29th July 2009.  ING Bank, Mirabaud Securities and Renaissance Capital are acting as Joint Bookrunners (the 'Joint Bookrunners') with FirstEnergy Capital Corp. acting as Co-Manager responsible for Canada (together with the Joint Bookrunners, the 'Managers') for the Placing. In addition, Renaissance Capital has arranged for a private placement by an investor into Claremont Holdings Limited, the existing 90% owner of Zhaikmunai. As a result, Claremont Holdings Limited has agreed to subscribe for an additional 30,000,000 Common Units in the form of GDRs, at a price of US$4.00 per GDR, which will result in Zhaikmunai receiving total gross proceeds of US$300 million.

Zhaikmunai will apply for admission of the GDRs to the Official List of the UK Financial Services Authority and admission to trading of the GDRs on the main market of the London Stock Exchange ('Admission'). It is expected that Admission will take place and that trading will commence in mid-August 2009 following satisfaction of certain conditions precedent to the Placing.

The Placing is conditional upon, inter alia, Admission becoming effective, upon the passing of the resolutions (without amendment) at the special general meeting of limited partners scheduled for 19th August 2009 and receipt of all necessary regulatory approvals, including the relevant confirmations from the Kazakh authorities that they do not intend to exercise their priority right to purchase the GDRs in accordance with Article 71 of the Kazakh Subsurface and Subsurface Use Law. The Placing is also conditional on the waiver of existing events of default under Zhaikmunai's US$550 million revolving credit facility (the 'Facility') and the deferral of certain payments due under the construction contract for the Gas Treatment Unit. 

Financing Update

As announced on 1 July 2009, Zhaikmunai has continued negotiations with its existing lenders under the Facility regarding potential investors and waivers of the outstanding events of default. A term sheet has been approved by the credit committees of the majority lenders under the Facility which (upon its implementation) will result in those events of default being waived, in return for, inter alia, the lenders agreeing to reduce the size of the Facility to US$382 million and increasing the rate of interest payable thereunder to LIBOR plus 7%.  

If the Placing does not complete, then Zhaikmunai will need to consider on an urgent basis alternative sources of funding for its operations. In particular, if such funding is not obtained by mid-September 2009, then Zhaikmunai will need to suspend all capital expenditures until such time as it is able to obtain alternative sources of funding. If the Placing does not proceed as planned, then the lenders under the Facility could seek to accelerate the Facility and enforce their rights of security under the Facility, which includes pledges over shares in the indirect holding companies of Zhaikmunai LLP, Zhaikmunai's Kazakh operating entity. 

Kai Uwe Kessel, Zhaikmunai CEO, commented:

'We are very pleased that the offer has been so well received among existing and new investors. The high level of interest demonstrates that investors recognise the potential of Zhaikmunai and are confident in our ability to deliver growth in accordance with our strategy. The Placing has allowed the refinancing of Zhaikmunai to continue and will put the company in a stronger position to deliver its stated growth. We are confident that the conditions will be met to complete the Placing in the required timeframe. '

Further enquiries  




  Brunswick                       +44 (0)20 7404 5959          

  Michael Harrison

  Carole Cable  



About Zhaikmunai  


Zhaikmunai L.P. is a limited partnership engaged in oil and gas exploration, development and production that is quoted on the London Stock Exchange PLC (Ticker symbol: ZKM). Its principal producing asset is the Chinarevskoye Field located in northwestern Kazakhstan.  


Zhaikmunai L.L.P., a wholly-owned subsidiary of Zhaikmunai L.P., holds a 100% interest in and is the operator of the Production Sharing Agreement for the Chinarevskoye Field.  


Forward-Looking Statements:  


Some of the statements in this document are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of Zhaikmunai or its officers with respect to various matters. When used in this document, the words 'expects,' 'believes,' 'anticipates,' 'plans,' 'may,' 'will,' 'should' and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements.

This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. Zhaikmunai has not registered and does not intend to register any portion of the Placing in the United States, and Zhaikmunai does not intend to make any public offering of securities in the United States.

This announcement and any Placing mentioned herein if made subsequently are only addressed to and directed at persons in member states of the European Economic Area who are 'qualified investors' within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) ('Qualified Investors'). In addition, this announcement is for distribution in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or (ii) high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as 'relevant persons'). This announcement is directed only at relevant persons and it is not intended to be distributed, directly or indirectly, to any other person in the United Kingdom. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Other persons should not act or rely on this document or any of its contents.

Neither this announcement nor any copy of it may be taken or transmitted into the United States, Australia, Canada or Japan or to a resident, national or citizen of the United States, Australia, Canada or Japan. This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. The Placing and the distribution of this announcement and other information in connection with the Placing in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Common Units in Zhaikmunai have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to, or for the account or benefit of, citizens or residents of Australia, Canada or Japan except under circumstances which will result in the full compliance with the applicable laws and regulations promulgated by the relevant regulatory authorities in effect at the relevant time. 

ING Bank NV, FirstEnergy Capital Corp., Mirabaud Securities LLP and Renaissance Securities (Cyprus) Limited are acting exclusively for Zhaikmunai and no one else in connection with the offering. They will not regard any other person (whether or not a recipient of this announcement) as their respective clients and will not be responsible to anyone other than Zhaikmunai for providing the protections afforded to their respective clients nor for giving advice in relation to the Placing and, the contents of this announcement or any transaction or arrangement referred to herein.

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