(UEN.L) Urals Energy PLC Buy/Sell

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Author	Neftanik View Profile \| Add to favourites \| Ignore
Date posted	2009-11-05 07:49
Subject	Rencap Morning Monitor
Votes for this Posting	Voted 6 times. Not voted down.
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This mornings Rencap Mornming Monitor: UEN LN: SELL, target price: GBP0 Event: Yesterday (4 Nov), Urals Energy (UEN) announced the appointment of Alexei Maximov as its CEO, replacing interim CEO Leonid Dyachenko. Dyachenko will remain on the board and continue in his role as executive chairman. Maximov, 50, is one of the founding shareholders of the group that became UEN, and has served as an advisor to Dyachenko. UEN also said yesterday that it is continuing to work on its long-term strategy and intends to operate the remaining assets after the completion of an assets disposal to Sberbank, which is expected in the coming weeks. Importantly, it also announced for the first time that Ashmore's put option will be terminated for a nil consideration on completion of the Sberbank transaction. Action: Trading in UEN shares was suspended on 30 June 2009, pending the publication of 2008 annual accounts. If these are not published by 31 Dec 2009, the company will be delisted. UEN said yesterday it is examining whether the accounts could be published and trading in its shares on AIM could be resumed ahead of completion of the Sberbank transaction. Rationale: Our previously stated investment thesis on UEN was based on the view that there will be no material value left for shareholders after the completion of the Sberbank deal, assuming Ashmore's put option is alive (click here to view Urals Energy - Ashmore put option to be terminated dated 14 Jan 2009). However, a termination of the put for nil consideration could prove a very material positive catalyst for UEN, allowing it to retain control of both Arcticneft and Petrosakh, valued at about GBP0.22/share assuming zero remaining debt. Given Maximov's statement yesterday that the company intends to "restructure its other existing obligations", the remaining debt level could be clearly material, although impossible to evaluate now given the lack of accounts. It is therefore only after the release of UEN's 2008 financial results that we could properly adjust our fair value estimate for the company. Alexander Burgansky Telephone: +7 495 258 7904
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