Zoltav issues trading update, to restructure board
Source - SMW
Zoltav said directors now expected a FY pretax profit materially ahead of market expectations.
Management's efforts on driving operational performance, coupled with an ongoing programme of cost optimisation at an operating and administrative level, were paying off, it said.
In parallel with the Company's focus on organic growth, Zoltav has been actively assessing value accretive acquisitions in Russia and the wider CIS.
"This search has not, to date, yielded any prospects which the Board considers to be in the best interests of the shareholders. It remains challenging in the current oil and gas environment to access deals that are sufficiently value accretive for shareholders, as sellers are yet to materially adjust their expectations.
"While this market dynamic persists, the Board has resolved to concentrate the Company's efforts solely on the performance of the Western Gas Plant and on the development of its organic opportunities at Koltogor and Bortovoy - particularly the considerable resource in the Eastern Fields of Bortovoy, where the Company is working to understand better the feasibility and economic viability of the development options.
"In light of the Company's sole focus on existing assets and organic opportunities, the Board, in consultation with Zoltav's major shareholders, has resolved to restructure its composition from six directors to three, commensurate with the current size of Zoltav's business.
"The effect will be to significantly reduce the corporate overhead while maintaining an appropriate level of corporate oversight, with a Board consisting entirely of three non-executive directors, the majority of whom are independent of the Company's major shareholders.
"It is the intention of the newly constituted Board that the executive management function of the Company will, following a period of transition, be predominantly situated in Saratov, where Bortovoy and the Company's Western Gas Plant are located.
"Andrey Komarov will remain with the Company in a non-board capacity as chief executive, continuing to oversee, among other things, the excellent operational progress being made at the Western Gas Plant.
"Accordingly, in addition to Stephen Lowden (Senior Independent Non-executive Director) whose intention not to stand for re-election at the forthcoming AGM was announced by the Company on 12 August 2016, Alastair Ferguson (Executive Chairman) and Andrey Komarov (Executive Director) will not stand for re-election at the AGM; and all three directors will retire from the Board effective on completion of the AGM.
"The resolutions for the re-elections of Mr Ferguson and Mr Komarov will be withdrawn from the AGM. Zoltav wishes to thank the retiring directors for their valuable contributions to the Company.
"Subject to their re-election, Marcus Rhodes, an experienced director of major publicly-listed companies operating in Russia and the CIS and a qualified chartered accountant and member of the Institute of Accountants in England & Wales, will become Non-executive Chairman and Senior Independent Director of the Company on completion of the AGM, while Alexander Gorodetsky and Andrey Immel will remain in their roles as Non-executive Directors, ensuring continuity in the Company's governance.
"The Audit Committee and the Nomination and Remuneration Committee will, effective from completion of the AGM, comprise Marcus Rhodes and Alexander Gorodetsky, with Marcus Rhodes remaining chairman of the Audit Committee and Alexander Gorodetsky appointed as chairman of the Nomination and Remuneration Committee."