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  • Urals Energy Capital “Highly Constrained”, Prepares To Load Tanker

    Urals Energy PCL said Thursday that its working capital continues to be “highly constrained” after an un-authorised USD1.5 million loan made from its funds left it short of working capital.

    The Russia-focused exploration & production company also added that its tanker has arrived at the Kolguev Island where loading should commence “shortly”.

    The group expects to receive the proceeds from the tanker shipment from Arcticneft, which deemed “of critical importance” to its working capital, by the second half of November.

    Based on current Brent prices, Urals expects to earn USD7.5 million from the shipment, of which after the repayment of the current pre-export finance loan, the company should cash in USD2.5 million.

    The company is currently conducting a short-term capital review of any transaction by its subsidiary, JSC Petrosakh, that are outside of the ordinary course of business.

    In mid-October, the company warned that unless a solution to the its working capital deficit was in place by the end of the month, then it will have to take steps to protect its creditors’ interests.

    Urals warned that if the review fails to find a solution to its funding needs, an possible outcome could result in “part or all of the group entering into an insolvency process”.

    The company had already secured funding to cover its working capital needs, however, due to the unauthorised actions of Sergey Kononov, who issued a USD1.5 million loan from the company’s funds to an employee of JSC Petrosakh, the board estimates that, even after the cash inflow from an upcoming tanker shipment, it will face a working capital deficit of USD3 million.

    Urals is in dialogue with Kononov via his legal advisers, regarding actions to reverse its working capital deficit.

    The company explained: “Such actions could involve measures to effectively reverse the transactions authorised by Kononov and or the return of a certain amount of working capital from the Kholmsk commercial seaport.

    “Alternatively, Kononov, or an entity connected with him, could provide interim financial support to the group.”

    Urals Energy shares were trading up 3.3% at 31.0 pence.

    Source

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