The principal shareholders of OAO Sibneft and YUKOS Oil Company have signed definitive agreements under which YUKOS:
- will acquire shares representing 20% of the issued share capital of Sibneft less one share for a total cash consideration equivalent to US $3 billion ("Share Purchase") and
- will acquire up to 72% of the issued share capital of Sibneft plus one share in exchange for up to 26.01% of the fully diluted share capital of the new YukosSibneft ("Share Exchange").
The Share Purchase and Share Exchange are currently scheduled for completion on December 31,2003. Completion of both the Share Purchase and the Share Exchange is subject to the satisfaction of a number of conditions including shareholder and regulatory approvals and completion of due diligence by both parties.
Sibneft principal shareholders and YUKOS have also agreed that the combined company will have moderate leverage. It is intended that the total net debt at December 31, 2003 will not exceed US $5 billion subject to possible adjustment if agreed between the parties in the case of new acquisitions. The individual net debt positions of both companies prior to completion will reflect their relative values as parts of the combined entity.