UPDATE 2-Sibur, Amtel form Russian tyre venture

(Adds quotes, share status, background, details)

By Vladimir Soldatkin and Amie Ferris-Rotman

MOSCOW, June 30 (Reuters) - Russian petrochemical company Sibur is buying a controlling stake in indebted tyre manufacturer Amtel-Vredestein (AMVq.L) to form a top 10 global tyre maker, the companies said on Monday.

Under the terms of the deal, Amtel will buy Sibur's existing tyre-making business through the issue of almost 160 million new ordinary shares to Sibur.

Amtel, which has suffered from debt refinancing problems, also plans to raise $150 million through a private placement of almost 80 million shares at no less than $1.89 each. Sibur will buy $50 million of these shares and Sibur-Russian Tyres will provide $40 million in interim funding.

"On the one hand this is a reverse acquisition, by which Sibur, a private firm, buys listed firm Amtel through its subsidiary," Sibur-Russian Tyres Deputy General Director for Strategic Development Igor Karavaev told reporters.

"As a result, the company and its listing on the London Stock Exchange is saved, which has become one of the main goals in joining our businesses," he said.

Sibur-Russian Tyres, which had a 20 percent share of Russia's tyre market last year, is the largest tyre producer in eastern Europe, with orders totalling over $1 billion annually.

Amtel, however, has said it expects to see continued losses.

It posted a net loss of $33.5 million in the first half of 2007 and has said losses will continue on a consolidated basis due to negative contributions by its tyre retail business, AV-TO, and high interest expenses.

"The first stage of the deal involves restructuring our debt ... After this we will place the private placement," Amtel Deputy Chief Executive Nikolai Khalko told reporters.

Shortly before announcing the deal's completion on Monday, Amtel suspended trading in its shares on the London Stock Exchange until further notice.

Amtel has repeatedly said it was having difficulties in refinancing its short-term debt due to debt market weakness and has warned about potential supply disruptions in the past.

Russia's Alfa Bank and London-based Rothschild [ROT.UL] are acting as financial advisers for Amtel, while Morgan Stanley (MS.N) is Sibur's advisor.

Amtel borrowed heavily in recent years to fund acquisitions, with most of its debt in roubles or euros. (Editing by David Cowell)