Russian junior Zoltav set to delist

Shareholders in junior Russian producer Zoltav Resources have approved the company's delisting from the London stock exchange, the company reported on January 26.

Zoltav's main owner ARA Capital has made an unconditional offer to buy ordinary shares in the company from other shareholders, the company said.

Zoltav operates a cluster of gas fields in Russia's Saratov region. It announced its intention to delist in early October, causing its share price to slump by a quarter.

The company said the listing would provide it with access to capital for acquiring and developing assets. At that time Zoltav also secured 8.4bn rubles ($106mn) in debt financing from Russian state lender Sberbank to fund development at the Bortovoy licence in Saratov.

Bortovoy contains nine gas fields but so far only two have been brought into production. Five more are due to be commissioned between 2022 and 2030. Zoltav chairman Lea Verny has said the financing from Sberbank is "critical for the company to ensure its future prosperity."

Elaborating on its decision to delist, Zoltav explained last year December that since 2014, when oil prices crashed and the West imposed sanctions on Russia in response to its annexation of Crimea, "the perception of investors in the London market towards junior oil and gas companies, particularly those focused primarily on Russia, has deteriorated and the company has been unable to attract investment or access funding from the public capital markets."

This is why Zoltav has resorted to Russian financing, it said. The company has no major UK-based institutional investors and said it was unlikely it could raise finance through the issue of new shares, and so had opted to delist.

ARA Capital is owned by Arkady Abramovich, the son of Russian billionaire Roman Abramovich.