Galnaftogaz EGM Approves Capital Increase of USD 57 mln

At their EGM yesterday, Galnaftogaz (GLNG: U/R) shareholders approved a capital increase of UAH 290 mln (USD 57.4 mln). The company will place 1,812.5 mln additional shares at market price, UAH 0.16 (USD 0.032). The capital injection is UAH 50 mln (USD 9.9 mln) more than planned (see our news from Oct. 23). The ex-rights date was rescheduled to November 30. Subscription will take place from Nov. 30, 2007 – Jan. 29, 2008. The capital increase appears to be part of the company’s plans to gear up for an IPO in 2008. Proceeds will be used to expand the company’s retail network next year, which is likely to exceed our forecast of 291 stations. Our expectation of 256 stations by the end of this year is likely to be met.