Libya stake in Circle Oil frozen as EU turns screw on Gaddafi
Published 12/03/2011 | 05:00
COLONEL Gaddafi's state-owned Libya Oil Holdings has had its €38m stake in Irish exploration firm Circle Oil frozen on foot of a European Union order that's been put in place to put pressure on the embattled dictator.
Libya Oil Holdings has an almost 18pc stake in Circle Oil and it had been under scrutiny over the past number of days as the EU moved to undermine Col Gaddafi's regime.
The holding is worth £33m (€38m), based on Circle Oil's closing price in London last night, where it is listed on the Alternative Investment Market.
Circle Oil said that having taken legal advice, the company considered that the ordinary shares that were beneficially owned by Libya Oil Holdings (LOH) were subject to the EU regulations and were therefore "effectively frozen".
Circle Oil said it informed yesterday that it would not register any transfer in respect of the shares until further notice.
Shares in Circle Oil, which is active in Egypt, Morocco, Oman, Tunisia and Namibia, fell 5.65pc yesterday.
The EU said yesterday that it had frozen the assets of five Libyan financial institutions including the country's central bank, the Libyan Investment Authority, Libyan Foreign Bank, Libyan Housing and Infrastructure Board and the Libya Africa Investment Portfolio.
The EU said the vehicles were under the control of Col Gaddafi and his family and that they represented a "potential source of funding for his regime".
The Central Bank of Libya owns 5pc of Italy's biggest bank, UniCredit, which also froze the associated shareholder rights. Another 2.6pc of the bank is owned by the Libyan Investment Authority.
Libya Oil Holdings paid £19m (€22m) to acquire a 29.7pc stake in Circle Oil in 2008 as part of a £33m placing. Iceland's Kaupthing Bank was also an investor.
It collapsed just weeks later. The Libyans' stake was diluted following further placings by Circle.