Moscow, 12th March 1999: OAO Siberian Oil Company ("Sibneft"), one of Russia's leading integrated oil producers, and Dart Management Inc. announced today a landmark agreement. The accord will result in Dart Capital Limited, a company controlled by a major investor in Russia, Kenneth B. Dart, acquiring an equity stake in Sibneft equal to just under 5% of Sibneft. Mr. Michael Hunter, President of Dart Management Inc., has also accepted an invitation to join the Sibneft Group Board as a non-executive director.
Mr. Dart is President of Dart Container Corporation Michigan. In his private capacity as a large investor in Russia he has strongly advocated improvements in the corporate governance practices of Russian companies. In July last year Sibneft became the first Russian company to issue a corporate governance charter in line with international best practice.
Under the terms of the agreement announced today a group of investors led by Mr. Dart will exchange their shares in Noyabrskneftegas ("NNG"), Sibneft's oil production subsidiary, for equity shares in Sibneft at a ratio of eight Sibneft shares for every one NNG ordinary share and four Sibneft shares for every one NNG preferred share in accordance with the offer made by Sibneft to all NNG shareholders on December 30th 1998. In addition, another shareholder of Sibneft will exchange an additional block of Sibneft shares in return for equity stakes in other Russian companies previously owned by the Dart Group. In aggregate just under 5% of Sibneft shares will be held by Dart Capital Limited, a company controlled by Mr. Dart and other investors.
"The Dart Group has consistently warned of the need to improve corporate governance practices in Russia", said MICHAEL HUNTER, PRESIDENT of DART MANAGEMENT, Inc., "particularly the need to respect the rights of minority shareholders. We would not now be taking a minority position in Sibneft if we were not convinced that Sibneft is committed to following internationally recognised principles of sound corporate governance."
" We believe that Sibneft, which has embarked on an ambitious and broad ranging programme to cut costs, improve transparency and increase profitability, has the potential to be one of the most profitable companies in Russia," said Mr. Hunter, "The Dart Group looks forward to working with Sibneft in achieving its corporate restructuring and business goals."
"We welcome the Dart Group as an important shareholder in our company", said EUGENE SHVIDLER, PRESIDENT of SIBNEFT, "and we look forward to their full participation on our Board of Directors."
Mr. Shvidler concluded, "Sibneft fully recognises the concerns of international investors about the abuse of minority shareholder rights in Russia, particularly in the oil sector. We are determined to set Sibneft apart from this trend and set a new benchmark for good corporate governance in Russia. We believe that the presence of the Dart Group on our Board will strongly reinforce that message to the international investment community."