UK White Nile returns strongly

By Lisa Urquhart, Financial Times

LONDON, June 4, 2005 — Shares in White Nile, the speculative oil exploration company, resumed trading yesterday after the group agreed to allow shareholders to sell up to 35 per cent of their holdings to increase liquidity.

The company’s shares had been suspended by the London Stock Exchange on May 27, the second time since their February flotation, over fears those who have gone short on the stock would not be able to cover their positions.

At the time, the LSE said it had taken the decision because of concerns about the orderliness of the Aim market.

The lack of liquidity in White Nile shares was due to 99 per cent of shareholders giving irrevocable agreement to a controversial transaction with the fledgling government of South Sudan.

As part of the agreement, White Nile is proposing to give Nile Petroleum, South Sudan’s state oil company, a 50 per cent stake in the company in return for a 60 per cent stake in an oil concession known as Block Ba.

Shareholders’ approval of the possible transaction meant they could not sell any stock ahead of a meeting on June 16 to rubber- stamp the proposal, thereby decreasing liquidity.

Shares in White Nile, which had been suspended at 141p a share, closed 23p higher yesterday at 164p.

The company listed at 10p a share and has seen its market capitalisation rise from £15m to £246m.

The first suspension of White Nile shares occurred on February 16.