Vostok Gas

Vostok Gas Ltd was a Bermuda-based investment company whose principal business was holding energy-related investments in the former Soviet Union. The company was established in 1996 under the name Vostok Nafta Investment Ltd and later adopted the Vostok Gas name on 24 May 2007. Its investment strategy was concentrated rather than diversified: almost all of its holdings consisted of American depositary receipts representing shares in the Russian natural-gas company Gazprom. Through this position, Vostok Gas owned approximately 1.5% of Gazprom. The company offered investors an indirect way to gain exposure to Gazprom and, more broadly, to the development and valuation of Russia's energy sector. Its structure also reflected the role of depositary receipts and investment companies in making securities from the former Soviet Union accessible to international capital markets. Vostok Gas was listed on the Stockholm Stock Exchange and became a constituent of the OMX Stockholm 30 index between July 2006 and January 2009. The business model became less attractive during the market turbulence associated with the 2008 financial crisis. Vostok Gas's board concluded that the volatility had undermined the rationale for maintaining a holding company centered on Gazprom American depositary receipts. At an extraordinary general meeting in December 2008, shareholders approved the board's proposal to liquidate the company. The liquidation was structured so that shareholders received Gazprom American depositary receipts in exchange for their Swedish depositary receipts in Vostok Gas. This effectively transferred the underlying exposure directly to investors rather than preserving it within a separate listed investment vehicle. Following the approved liquidation, Vostok Gas ceased to operate as an ongoing investment company. Its significance lies chiefly in its concentrated Gazprom holding, its role in the international investment market for Russian energy assets, and its eventual wind-down during the global financial crisis.

Vostok Gas originated as Vostok Nafta Investment Ltd, an investment company founded in 1996 and headquartered in Bermuda. Its mandate centered on oil and gas opportunities in the former Soviet Union. Rather than operating production facilities, pipelines, or retail energy businesses, the company pursued a financial-investment model based on ownership of securities linked to the region's energy companies. The company's portfolio became overwhelmingly concentrated in Gazprom. Almost all of its holdings were American depositary receipts for Gazprom, giving Vostok Gas an ownership position of approximately 1.5% in the Russian gas producer. This concentration made the company a specialized investment vehicle for investors seeking exposure to Gazprom through an internationally listed structure. The use of depositary receipts also enabled the underlying Russian securities to be represented in a form accessible to investors outside Russia. Vostok Gas was listed on the Stockholm Stock Exchange. Its market profile increased sufficiently for it to join the OMX Stockholm 30 index in July 2006. The company retained that index membership until January 2009. On 24 May 2007, Vostok Nafta Investment Ltd changed its name to Vostok Gas, a rebranding consistent with the prominence of its Gazprom investment and its focus on the Russian natural-gas sector. The investment-company structure became more difficult to justify during the financial-market turmoil of 2008. According to the board's rationale presented to shareholders, the volatility associated with the 2008 financial crisis had removed the attractiveness of maintaining a holding company for Gazprom American depositary receipts. Instead of continuing as a listed vehicle whose shares represented an indirect claim on Gazprom securities, the company proposed liquidation. At an extraordinary general meeting in December 2008, shareholders approved the liquidation plan. During the liquidation, shareholders received Gazprom American depositary receipts in exchange for their Swedish depositary receipts in Vostok Gas. The distribution converted the investment from an indirect, company-level holding into direct ownership of the underlying Gazprom depositary receipts. With the liquidation approved and implemented, Vostok Gas ceased to exist as an active investment company. Its history is therefore defined by the creation of a focused cross-border energy investment vehicle, its prominent Gazprom exposure and Stockholm listing, and its orderly wind-down during the global financial crisis.

• 2009

  Ends OMX Stockholm 30 membership

  [1]Vostok Gasen.wikipedia.org

  Vostok Gas's membership in the OMX Stockholm 30 index ended in January 2009.

• 2008

  Shareholders approve liquidation

  [1]Vostok Gasen.wikipedia.org

  At a December extraordinary general meeting, shareholders approved liquidation because market volatility had reduced the attractiveness of the company's Gazprom ADR holding-company structure.

• 2007

  Renamed Vostok Gas

  [1]Vostok Gasen.wikipedia.org

  Vostok Nafta Investment Ltd adopted the Vostok Gas name on 24 May 2007.

• 2006

  Joins the OMX Stockholm 30 index

  [1]Vostok Gasen.wikipedia.org

  Vostok Gas became a member of the OMX Stockholm 30 index in July 2006.

• 1996

  Investment company founded

  [1]Vostok Gasen.wikipedia.org

  Vostok Nafta Investment Ltd, the predecessor of Vostok Gas, was founded as an investment company focused mainly on oil and gas assets from the former Soviet Union.

A listed international investment vehicle providing concentrated exposure to Gazprom and energy assets from the former Soviet Union.

• Investment holding

  Gazprom American depositary receipts

  Vostok Gas's principal investment exposure consisted of American depositary receipts representing shares in Gazprom. These securities gave the company an internationally tradable form of ownership in the Russian gas producer and accounted for almost all of its holdings. The position represented approximately 1.5% of Gazprom and formed the economic basis of Vostok Gas's identity as a specialized listed investment vehicle.

• Listed investment-company security

  Vostok Gas Swedish depositary receipts

  The company's Swedish depositary receipts represented investor interests in Vostok Gas as a listed holding company on the Stockholm market. During liquidation, these receipts were exchanged for Gazprom American depositary receipts, allowing shareholders to receive the underlying investment exposure directly rather than through the liquidated company.

• 2008

  Liquidate the Gazprom holding companyStrategy

  Background

  The board determined that market volatility during the 2008 financial crisis had removed the attractiveness of maintaining a holding company centered on Gazprom American depositary receipts.

  Action taken

  The board proposed liquidation, and shareholders approved the proposal at an extraordinary general meeting in December 2008.

  Aftermath

  During liquidation, shareholders received Gazprom American depositary receipts in exchange for their Swedish depositary receipts in Vostok Gas. The company consequently ceased to operate as an active investment vehicle.

  Source

• 2007

  Rename the company Vostok GasStrategy

  Background

  The predecessor company, Vostok Nafta Investment Ltd, was heavily concentrated in Gazprom American depositary receipts and focused on former Soviet Union oil and gas investments.

  Action taken

  The company changed its legal and operating name to Vostok Gas on 24 May 2007.

  Aftermath

  The new name emphasized the company's association with Gazprom and the Russian gas sector.

  Source

1. 1Vostok Gasen.wikipedia.org