MOSCOW - Russian oil industry services firm Eurasia Drilling on Tuesday scrapped plans to place Global Depositary Receipts (GDRs) and pay a one-off interim dividend after bids failed to match the company's expectations.
Eurasia, which provides drilling services to oil and gas explorers in Russia and the Caspian Sea, had planned to raise cash for the dividend payout by placing at least 11.6 million GDRs.
Chief Financial Officer W. Richard Anderson said in a statement that the price offered for the GDRs did not reflect the underlying value of the company's business and did not properly give credit to the contemplated social dividend.
Shares in Eurasia closed at $16.50 per GDR on Monday implying the company would raise $191 million should investors agree to pay the market price.
Despite the fact that there was more than adequate demand for the GDRs on offer, the company decided not to proceed with the transaction, Anderson said the statement.
A source close to the company told Reuters earlier on Tuesday that Eurasia had decided against the placement, which it had announced the previous day.
Chief Executive Alexander Djaparidze, one of Eurasia's largest shareholders, said on Monday the one-off dividend payment would have amounted to around $150 million. He said Eurasia would not sell the GDRs at below market price.
Minority shareholders who had retained a right to participate in the placement would not take up that right, Eurasia said on Tuesday.
(Reporting by Katya Golubkova and Robin Paxton, Editing by Dmitry Sergeyev and Erica Billingham)