Friday, January 30, 2015
 
Follow sptimesonline on Facebook Follow sptimesonline on Twitter Follow sptimesonline on RSS Download APP
MOST READ



PARTNER NEWS


Legendary Porcelain Artworks for Your Home
The Gift Projects online showroom...


BLOGS



OPINION



WHERE TO GO?

19th Century Portraits

History of St. Petersburg Museum: Rumyantsev Mansion

Ineffable Light

Nikolai Roerich Apartment Museum

 

Rosneft Announces Share Price for Minority Buyout

Published: October 2, 2013 (Issue # 1780)



  • Russian Prime Minister Dmitry Medvedev addresses the International Investment Forum in Sochi.
    Photo: Alexander Astafyev / Pool / AP

On Monday, Sept. 30, Rosneft agreed to buy out the minority shareholders in RN-Holding (formerly TNK-BP) that remained from the Russian state energy companys acquisition of TNK-BP in March this year. According to a Rosneft press release, the shares are valued at about $2 apiece.

Rosneft CEO Igor Sechin had previously been opposed to the idea. According to Bloomberg, Sechins company has over $71 billion in debt, largely as a result of this years TNK-BP acquisition. Recent deals that have seen Rosneft acquire expensive natural gas assets have left Sechin even less inclined to fork over the extra money to these minority shareholders, who represent 5 percent of the former TNK-BP. At $2 a share, full acquisition of these shares would cost Rosneft about $1.5 billion.

Though Rosneft formally set the share price on Sept. 30, the decision to buy was made three days earlier in the form of a verbal commitment between Sechin and Russian Prime Minister Dmitry Medvedev at the International Investment Forum in Sochi.

To an audience of Russias business elite, Medvedev spoke generally about the countrys foreign investment climate and what the state has been doing and what it will be doing to improve it. He stressed the importance of the state taking responsibility for corporate governance and explicitly highlighted three state companies: Gazprom, Russian Railways and Rosneft.

At this point in his speech, Medvedev turned and addressed the Rosneft CEO, who was sitting only two seats away. I know that Rosneft, for example, still has an issue related to its minority shareholders, TNK-BP. Is this right, Mr. Sechin? Sechin affirmed that it was.

Medvedev proposed that to set an example of proper behavior, Sechins company should buy these shareholders out.

Sechin addressed Medvedev but looked primarily at the audience and consented, albeit hesitantly.

Taking into account your concern and solutiondespite the absence of a legal obligation to repurchase part of these shares, we will fulfill your objectives, but on a voluntary basis.

The issue that Medvedev was referring to dates back to Sechins initial refusal to buy out these minority shareholders or grant them 2012 dividends following the March acquisition that made Rosneft the largest oil company by market capitalization in the world. Rosneft is not a charity, Sechin had said earlier this year, in an attempt to explain this refusal.

One disgruntled shareholder, Gennady Osorgin, claimed that Sechins statements and actions had ruined the stocks value and in June filed a complaint against him with the Russian Union of Industrialists and Entrepreneurs, or the RSPP, reported Vedomosti. Official review of the complaint is ongoing.

While Sechins change of heart in Sochi was likely a welcome surprise to minority shareholders, the proposed price of $2, announced by Rosneft on Monday, was a disappointment. The main shareholders of former TNK-BP, by contrast, received almost double that amount per share in the $55 billion acquisition six months ago. Half of TNK-BP had consisted of four tycoons Mikhail Fridmen, German Khan, Viktor Vekselberg, Len Blavatnik who ended up splitting $28 billion.

Rosneft is the worlds largest oil company by output and is expected to have earnings of $13.8 billion in 2013. This will make it the largest contributor to the Russian state budget.





 


ALL ABOUT TOWN

Friday, Jan. 30



The Lermontov Central Library, 19 Liteyny Prospekt, will screen 'Almost Famous in English with Russian subtitles at 6:30 p.m. Cameron Crowe's Academy Award-winning comedy from 2000 stars Billy Crudup, Kate Hudson, and Patrick Fugit, and tells the story of a budding music journalist at Rolling Stone magazine in the 1970s. Admission is free.



Meet renowned Russian poet, journalist and writer Dmitry Bykov, famous for his biographies of Boris Pasternak, Bulat Okudzhava and Maxim Gorky, and winner of 2006 National Bestseller Award. Bykov will read old and new poems as well as answer questions about his works at the St. Petersburg Philharmonic, Main Hall, at 7 p.m. Tickets start at 1,000 rubles and are available at city ticket offices and the from the Philharmonic website www.philharmonia.spb.ru.



A retrospective of the films of Roman Polanski starts today at Loft-Project Etagi, 74 Ligovsky Prospekt, with a screening of Repulsion at 7 p.m. and Rosemarys Baby at 9:15 p.m. The series runs through Feb. 4 and will include Polanski's eminently creepy The Tenant, the cult comedy The Fearless Vampire Killers and Cul-de-sac among others. Tickets are 150-200 rubles and the complete schedule is available at www.vk.com/artpokaz/



Times Talk