Shares in London-listed Sibir Energy crashed yesterday after the Russian oil firm said it would buy more distressed real-estate assets from its key owner for $340m (£215m) in cash and debt.

Shares in London-listed Sibir Energy crashed yesterday after the Russian oil firm said it would buy more distressed real-estate assets from its key owner for $340m (£215m) in cash and debt.

The company's stock closed 57% lower at 43p, a loss on the day of 57p. The shares were down more than 60% at one stage.

Sibir had already angered minority shareholders when it said in October it would buy around $157m worth of real estate from its key owner, Russian businessman Shalva Chigirinsky.

The move was a clear departure from its core oil business.

The new deal foresees the purchase of various real-estate assets including the Russia Tower, a 600-metre steel-and-glass symbol of new Russian wealth being built at the Moscow International Business Centre, designed by Lord Norman Foster, which was halted last month because of a lack of financing.

Sibir asked the shareholders to approve the purchase of additional real-estate assets from Chigirinsky by the company, at a general meeting on December 18.

"Difficult times call for uncomfortable decisions to be made," Sibir chief executive Henry Cameron said.

"Doing business in Russia has never been for the faint-hearted and sometimes requires difficult calls in the boardroom," he added.

The company said the global financial crisis and consequential slide in share values has had "a domino effect" on Chigirinsky's financial position.

Chigirinsky and his partner Igor Kesayev control 47% of Sibir and the city government of Moscow owns 18%.

The company produces oil in western Siberia and has a refinery and a petrol station network in the Russian capital.

Most of the projects that Sibir will acquire from Chigirinsky have been suspended, in common with many other real estate developments in Russia.

Heavily indebted developers have been among the worst hit by the global credit squeeze.

Sibir is the second company in as many months to provoke criticism for buying assets to help billionaire investors.

In October, Russian power generator OAO OGK-3 announced plans to buy shares in companies controlled by Vladimir Potanin's Interros holding company.