Urals Energy Concludes Taas Loan Pay-Back Deal

PUBLISHED: Dec 08 2011 @ 09:30 | Comments (0) |

Urals Energy (LSE:UEN) announced on Thursday that they have reached a pay-back deal for loans made to Taas-Yurikah in 2009. Shares in the company rose 46.1% by late afternoon, trading at 9.5p.

Background on the Deal

The loans were issued by Urals Energy in 2009 as part of an acquisition agreement with Taas. They used the loans to pay off organisation fees for a US$600 million project loan provided by the Savings Bank of Russian Federation for the development of the SRB field, according to the statement. The unsecured loans bear interest of 12% and mature in February 2015.

Under the terms of an assignment agreement, Urals Energy assigned the benefit of the loans, along with all accrued interest, toNagelfar for a sum of US$26 million.

In accordance with the restructure agreement that the company entered into with Petraco, if the Taas loans are repaid prior to their due date, the proceeds are to be split between Petraco and Ural at a predefined proportion. The company will release US$10 million to Petraco and the outstanding balance of US$9.9 million will be settled in 2012.

Termination and Release Agreement

Urals also announced on Thursday that it has entered into a termination and release agreement with Finfund and Yakut Energy Limited. Under this agreement, Finfund agreed to release Urals of its obligation to pay fees under the terms of a sale and purchase agreement made in 2007 in exchange for a payment of US$4.4 million.

After the loan is assigned and Petraco is partially repaid, Urals will be left with US$11.6 million, which, according to the statement, they plan to use for general exploration, development, and working capital.

CEO Comments on the News

CEO Alexi Maximov commented on the situation:

“We are delighted to have concluded the Taas loan pay-back deal which has been achieved through nine months of negotiations in extremely difficult market circumstances Whilst the details and background to these matters are complex, shareholders will no doubt see that the Company is continuing to work tirelessly to strengthen its balance sheet and this is another firm step towards recovery and the future of Urals Energy.”

Company Spotlight

Urals Energy Limited is an AIM listed, Cyprus-based independent oil company with an operational focus on Russia. Urals’ main exploration and production take place in Timan Pechora and on Sakhalin Island. The company conducts its operations through its Russian subsidiary, OOO Urals Energy, a Russian limited liability company. Its head office is in Nicosia, Cyprus.

References
↑ Urals Energy Overview

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