Naftogaz initiates Ukrnafta shareholder meeting without Kolomoisky

Ukraine’s leading crude oil producer Ukrnafta (UNAF UK) reported on July 7 it has received a request from its major shareholder Naftogaz (the owner of a 50%+1 share) to call an extraordinary shareholder meeting. The meeting intends to approve the company’s financial recovery plan (the restructuring of its tax debt of more than UAH 10 bln), as well as approve the company’s results for 2015 and elect a new supervisory board. The company’s AGM scheduled for July 7 failed to convene as its supervisory board did not approve the AGM’s agenda. Namely, the board meeting, held on June 22, failed due to a lack of quorum after six members did not sign up. Quorum for the meeting is 8 of 11 board members, according to Ukrnafta’s statute. Of 11 seats in the board, five are occupied by representatives of Igor Kolomoisky, who controls more than 40% of Ukrnafta’s shares.

Ukrnafta reported in its July 7 release that the request to call a shareholder meeting should be considered by the company’s supervisory board.

The goal of Naftogaz is to reach agreement on the agenda of Ukrnafta’s upcoming meeting with minority shareholders, said Andriy Kobolev, the state firm’s CEO, as reported by the oilnews.com.ua news site on July 7. “If the minorities won’t agree upon the conditions offered by Naftogaz, Ukrnafta’s AGM will be held without them,” Kobolev said, setting the deadline for Wednesday.

Alexander Paraschiy: Naftogaz and Kolomoisky have different visions on how Ukrnafta’s tax debt should be restructured. As we understand it, the key difference is in the view of how much money (owed to Ukrnafta) Kolomoisky and Naftogaz should contribute in order to improve the oil firm’s liquidity.

Kolomoisky did not like Naftogaz’s plan. To prevent the July 7 AGM, Kolomoisky simply undermined the June 22 board meeting by denying it quorum.

Now Naftogaz is trying to call a shareholder meeting by itself, without the approval of the supervisory board meeting (where quorum is impossible without Kolomoisky’s representatives). Ukrnafta’s statute and Ukrainian legislation allow for such a step, in case the company’s board makes no decision on the meeting in the ten days after Naftogaz’s request. In which case, Ukrnafta’s meeting may take place without the involvement of Kolomoisky. However, it’s very likely that Kolomoisky will use a standard tactic of obtaining a court ruling that will prohibit convening the shareholder meeting.