forecaster:
do you suppose the $11.36 is what bernie will agree to?...coolie
June 1, 2001
Canadian Driller Fights Hostile Kazakh Bid
By BIRGIT BRAUER
Get Stock Quotes Look Up Symbols
Separate symbols with a space.
Portfolio | Stock Markets | Mutual Funds | Bonds | Currencies | Bank Rates | Industries
LMATY, Kazakhstan — Doing business here is not for the fainthearted, as Hurricane Hydrocarbons, a Canadian company with all its operations here, has been learning. On top of the usual developing- country headaches, Hurricane has suffered from being too strong a magnet for unwanted attention.
After being driven almost to bankruptcy by a local rival, having its refinery stormed by commandos acting on behalf of a disgruntled former employee, retaking the plant with its own armed security force and fending off charges of tax evasion and contamination of oil wells with bacteria, Hurricane may have thought it had seen it all.
Hardly. Hurricane was shocked again when a major shareholder, Central Asia Industrial Holdings, an offshore affiliate of Kazkommertsbank, Kazakhstan's leading banking group, announced a hostile takeover bid last month.
"The bid came as a surprise," said Bernard Isautier, chairman of Hurricane, which has headquarters in Calgary, Alberta. "This offer is totally inadequate. The price is extremely low."
The current trouble for Hurricane started when a drawn-out dispute with the Chimkent refinery, the main customer for the oil Hurricane produces here, nearly bankrupted the company in 1999. Hurricane got out of that scrape by acquiring 88.8 percent of the refinery for stock.
"It was the only way to save the company at the time," Mr. Isautier said. But the deal put 30 percent of Hurricane's stock in Central Asia Industrial's hands — "a very stiff price to pay," Mr. Isautier said.
Hurricane's finances have recovered, with revenue shooting up to $523 million last year from $155 million in 1999 on the back of a 30- percent rise in oil prtoduction.
Central Asia Industrial's offer is for 18.4 million shares of Hurricane, enough to give it control, for $6.66 a share. Mr. Isautier said an independent appraisal by J. S. Herold put the shares' fair value at $11.36 apiece.
It could be worse, one Western oil executive based here observed. "At least it is an offer done in the marketplace," he said.
Other analysts said the company was caught in a tug of war among Kazakh business factions to win dominance of the refining industry.
Hurricane's board decided to fight the takeover offer by issuing a $200 million special dividend to shareholders in the form of a debenture, a move that would oblige a buyer to use its own cash rather than Hurricane's assets to pay for a takeover. Hurricane's stock has since risen to $8.48 a share, above the bid price.
Home | Back to Business | Search | Help Back to Top |
