Almost a year on from floating Vallar (LON:VAA), Nat Rothschild is teaming up with Tony Hayward of BP fame to raise £1bn in a new oil and gas asset acquisition vehicle, imaginatively called Vallares.
This morning's announcement indicates that Vallares will adopt the same proven model used by Vallar last year when it raised £707m then acquired interests in Indonesian coal producers, Bumi plc and Berau Coal.
The value opportunity
The Directors believe that increasing global industrialisation and urbanisation, particularly in Asia (outside Japan) and the emerging markets, is likely to lead to increased global demand for commodities. At the same time, the Directors believe that the supply of oil and gas will be constrained by insufficient investment to keep pace with this demand and by exploration and development challenges. This supply-demand dynamic is likely to generate sustained inflation in commodity prices.
In recent years many valuable resource assets have been acquired by smaller companies that often do not have access to capital or sufficient capability to realise their development potential.
Accordingly, the Directors believe that the resources sector, and especially the oil & gas industry, presents multiple attractive investment opportunities.
Business strategy and execution
The Company intends to target a major company, business or asset with an aggregate Enterprise Value of between £3 billion and £8 billion, although an opportunity with a smaller or larger Enterprise Value1 may be considered. The Company aims to achieve this through identifying and acquiring interests in companies, businesses or assets where the existing owners are attracted to the Vallares proposition, namely the opportunity to hold an ownership interest in a London listed company with a high quality Board and the cash, access to capital and capability to unlock the value of their assets.
The Company intends to focus primarily on emerging and under-developed geographic regions where the Founders collectively have prior knowledge and experience. These include Russia, the CIS region, the Middle East, Africa, Asia and Latin America. However, the Company will not exclude other geographic regions where an opportunity presents an appropriate investment proposition.
- Nat Rothschild
- Tony Hayward
- Tom Daniel
- Julian Metherell
The Founders have committed £100m of capital to the Company and its group, including £80m to subscribe for Ordinary Shares in the Placing.
Board of Directors
- Rodney Chase - Chairman (ex-Petrofac, BP, TNK-BP, Tesco, BOC, Diageo)
- Jim Leng - Senior Independent NED (Alstom, TNK-BP, AEA, HSBC, ex-Corus, Pilkington, Hanson, IMI)
- Sir Graham Hearne - Independent NED (Catlin, Braemar Shipping, ex-Enterprise Oil)
- George Rose - Independent NED (National Grid, ex-Orange, Saab, BAE)
- Nat Rothschild - NED (Vallar, Rusal, EN+, Barrick Gold, ex RIT Capital Partners)
- Tony Hayward - NED (TNK-BP, AEA, ex-BP)
- Robert Sinclair - NED (Chariot Oil & Gas, Artemis Trustees, + various investment trusts, ex-Vallar, Chromex Mining,
- Ian Domaille - NED
Vallares will list on the London stock market at £10 per share; it expects to close its order book on or around 20 June.