Sector News

Russia signs decree to sell 19.5 percent Rosneft stake

November 7, 2016

Russia published a government decree on Monday ordering the sale of a 19.5 percent stake in state-controlled oil giant Rosneft in time for the proceeds to be received by the end of the year.

The decree, signed by First Deputy Prime Minister Igor Shuvalov, ordered the sale of stake by state energy firm Rosneftegaz to be finalised by Dec. 5, the document showed.

Russia’s budget, which is in danger of running up a bigger deficit this year than the 3.7 percent of gross domestic product envisaged, needs about 1 trillion rubles ($15.7 billion) in total from privatization deals in 2016.

So far, the state has raised 382 billion rubles from sales of shares in diamond producer Alrosa and oil company Bashneft. The rest is expected to come from the stake in Rosneft, which bought a 50.1 percent stake in Bashneft in October.

Economy Minister Alexey Ulyukayev said in a statement that the proceeds from the Rosneft sale were expected to be a minimum of 748.3 billion rubles, and that amount would then be adjusted by a coefficient of 0.95.

That would translate into a minimum of 711 billion rubles in budget proceeds, according to Reuters calculations.

Under the current plan, Rosneft is due to buy the 19.5 percent stake itself so the proceeds can fund the budget before the end of the year. Rosneft would then resell the shares to investors some time in the first quarter of 2017.

At the moment, Rosneftegaz holds a 69.5 percent stake in Rosneft. Igor Sechin, Rosneft’s chief executive, is also expected to be re-elected as chairman of the Rosneftegaz board, according an Interfax source.

Russian officials have said Rosneft has the funds to buy the 19.5 percent stake from Rosneftegaz. Rosneft agreed on Monday to sell a 20 percent stake in its Verkhnechonskneftegaz production unit for $1.1 billion to China’s Beijing Gas.

The deal is subject to regulatory approvals.

($1 = 63.7411 rubles)

By Anastasia Lyrchikova, Oksana Kobzeva and Darya Korsunskaya

Source: Reuters

comments closed

Related News

August 23, 2019

The higher purpose of being a CEO

Borderless Leadership

LinkedIn Twitter Xing EmailWhen I left my second large company experience to become President of a small manufacturing company I did so driven by ego; I fancied the title. Soon […]

August 23, 2019

As Brexit nears, Britain’s drugs, devices and pricing regulators seek the exit

Life sciences

LinkedIn Twitter Xing EmailFirm details on exactly how the U.K. will regulate new medicines is still to be decided after it leaves the EU later this year (caveats on timing […]

August 23, 2019

The Simply Good Foods Company acquires Quest Nutrition for $1bn

Consumer Packaged Goods

LinkedIn Twitter Xing EmailThe Simply Good Foods Company, the owner of Atkins-branded food products, has secured a deal to acquire protein snack maker Quest Nutrition for $1 billion. Quest, which […]

How can we help you?

We're easy to reach