Ruspetro plc 

In mid 2014, Strand Hanson was appointed by Ruspetro plc (“Ruspetro” or the “Company”), a Russian oil and gas company listed on the premium segment of the Official List and admitted to trading on the Main Market, to act as Sponsor and Financial Adviser to the Company as it sought to secure additional capital and a long term restructuring of its balance sheet, in order to be able to implement its development plan to unlock the potential of its fields through drilling multi-stage fractured horizontal wells. Despite having amended the terms of its existing debt facility with Sberbank LLC (“Sberbank”), extending its shareholder loans and securing short term funding from Glencore, the Company continued to have a very high level of indebtedness and minimal working capital to be able to implement its development plan.

In November 2014, following successful discussions with its major shareholders, Sberbank and “Bank Otkrite Financial Corporation” (OJSC) (“Otkrite”), the Company issued a prospectus setting out details of the debt restructuring and refinancing  (“Restructuring”).  The principal components of the Restructuring comprised the purchase of the Group’s existing US$337m Sberbank facility (the “Existing Facility”) and 10.4m shares in the Company held by Sberbank (along with a put option over those shares) by Otrkrite and the subsequent replacement of the Existing Facility with a new five year US$150m term loan to be provided by Otkritie (the “New Facility”) together with the conversion of the remainder of the Existing Facility of US$187m into equity and the settlement of the US$20m put option through the issue of shares, such that Mastin (an SPV related to Otkritie) held, on completion of the Restructuring, in aggregate, 25% of the enlarged share capital of Ruspetro.

As part of the Restructuring, Otkritie also agreed to provide a new credit facility for up to US$44.7m for general working capital purposes, a new development facility for up to US$100m, available in two equal tranches, to be used for the purposes of implementing the Company’s development plan. In addition, the Company raised a further US$52.7m via a fully underwritten open offer to all shareholders and a placing with the Company’s major shareholders. The Company’s major shareholders agreed to support the Restructuring and the extension of the shareholder loans on the basis that they retained, in aggregate, 50% of the enlarged issued share capital following completion of the Restructuring, and the fully subscribed open offer was scaled back accordingly.

The Restructuring was a complex multi-jurisdictional deal set against a falling oil price and Rouble and international sanctions against Russia.  As Sponsor and Financial Adviser, Strand Hanson ensured that issues relating to free float, working capital, related party transactions and concert parties were identified and resolved and that the approvals of both the UKLA and Takeover Panel were obtained.