Nathaniel Rothschild, a scion of the Rothschild banking dynasty, looks set to make millions by announcing plans to merge his London-listed investment vehicle Vallares with oil producing group Genel Energy International.
The merger, announced on 6 September, will see Vallares acquiring a 100% stake in Genel through the issue of new shares worth $2.1 billion, the group said in a statement.
Genel International, a privately owned oil company, focuses on oil exploration in the Kurdistan region of Iraq. The merger comes as Vallares looks to take advantage of Genel’s strong presence in the region, estimated to have one of the largest oil and gas reserves yet to be discovered, according to the US Geological Survey.
Vallares, founded in June this year by Rothschild and Tony Hayward, the former chief executive of oil and gas company BP, will see them both holding a 7% stake each in the combined business.
The newly formed company, to be named Genel Energy, is expected to have a market value of around $4 billion (€2.84 billion), a spokeswoman for Vallares told CampdenFB. The company plans to list on the London Stock Exchange by early 2012.
The deal will significantly add to the fortunes of Rothschild and comes after the successful listing of Indonesian company, Bumi Resources, on the LSE in April 2011. The listing was facilitated through a shell company called Vallar, set up by Rothschild as well as other investors in July 2010. The spokeswoman wasn’t willing to comment on Rothschild’s involvement in Vallares.
Genel International, which is majority owned by Turkey’s richest man Mehmet Karamehmet and his family, will see a dilution of the family’s ownership in the company to 19.7% from the current 56%, according to the statement.
“The family agreed on the deal with Vallares as they will be able to keep their status in the combined company. They are also committed to keep their shareholding and retaining their interest in the business,” the spokeswoman said.
Karamehmet’s daughter Gulsan Nazli Karamehmet Williams has been nominated as a non-executive director of Vallares. “She has been appointed as an independent shareholder to represent the ongoing family interest,” the spokeswoman added.
Genel International’s co-founder Mehmet Sepil will become president of the new company, while Vallares’ Hayward and Rothschild will hold the positions of chief executive and non-executive director respectively.
Karamehmet hit the headlines last year after he was found guilty by a Turkish court of embezzling money though Pemubank, a lender he owned until 2002. He has since appealed the judgement.