Shares in Russian oil company Sibir Energy have jumped 54.25p to 187.75p as the company abandoned a controversial deal to buy $500m worth of real estate assets - including a hotel in Moscow - from majority shareholder Chalva Tchigirinski.
News of the proposed purchase in December saw the company's shares halve, with analysts saying it was a clear departure from Sibir's core business, especially when property prices in Russia, as elsewhere, had fallen sharply.
At the time the deal was announced, the company said "the global financial crisis and consequential drop in share values have had a domino effect on Mr Tchigirinski's financial position." It added: "As the preservation of the company's shareholder structure was paramount, the board of Sibir has concluded the company must take over the bulk of Mr Tchigirinski's remaining real estate business."
Tchigirinski and his partner Igor Kesayev control 47% of Sibir, while the Moscow government - which reportedly opposed the deal - owns 18%. A week before Christmas, a meeting to approve the purchase was adjourned and today the company said starkly it would not be buying any of the property assets after all. "The extent to when contracts have already been entered into, these will be unwound," it added.
