MOSCOW: A1, an investment vehicle of Russian billionaire Mikhail Fridman, told Reuters on Monday it had acquired a 24.4 percent stake in Regal Petroleum, which produces gas and gas condensate in Ukraine.
News of the deal sent Regal's shares sharply higher in London and they closed up 10.6 percent on the session.
"We are ready to say today that we have acquired 24.4 percent (in Regal Petroleum). The buyer is one of A1's subsidiaries, and the seller is CIS Natural Resources," A1 President Mikhail Khabarov told the Reuters Russia Investment Summit.
Khabarov declined to disclose financial details of the deal, but said Regal Petroleum's revenues stood at 25.3 million pounds ($40.5 million) in 2012.
"We do not rule out that we may invest more in this company. We believe it has potential to increase its market capitalisation and think that we can make the management more efficient in the interests of all shareholders," he said.
A1 is a unit of Fridman's Alfa Group and its investment portfolio ranges from car dealerships to cinemas to real estate.
It is also known for investing in companies that struggle to pay debts or are embroiled in corporate disputes, selling them on relatively quickly after resolving the standoff.
However Khabarov, who has a seat on Alfa-Group's supervisory board, said he saw long-term potential in Russian coal asset Zarechnaya, part of an industry that has seen prices tumble over 60 percent since 2011.
A1 represents a businessman who claims a 50 percent stake in Zarechnaya, a coal company in western Siberia's Kuznetsk Basin, or Kuzbass, one of Russia's biggest coal deposits.
"In fact we've got not just an asset but an option (exercisable when) this market grows," he said, citing the mine's efficiency as an advantage over the small and medium-sized coal firms that he sees consolidating in a few years.
"Most likely, we will not sell it (Zarechnaya) immediately. It would be more interesting to use it as a basis for consolidation in the sector and creation of a major player with annual production of 30 million tonnes. Possibly with a partner."
He also named metals, transport and infrastructure as potentially attractive areas for investment thanks to their cheap valuations but cautioned that a quick profit was unlikely.
"Ferrous, non-ferrous metals, coal they are all in a very difficult situation All these sectors are at the bottom and no-one can say when they will exit this part of the cycle."
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