Exec: Sanctions make sale of sizeable stake in Transneft impossible

MOSCOW, Dec 6 (PRIME) -- Privatizing a sizeable stake in Russian oil pipeline monopoly Transneft at a fundamentally fair price is impossible due to the Western sanctions, Transneft President Nikolai Tokarev said in an interview to the Energeticheskaya Politika (Energy Policy) magazine published on Friday.

“It is currently impossible to sell a significant stake in Transneft efficiently to financial investors at fundamentally fair price due to the impact of financial sanctions from the U.S., the E.U., and other foreign countries,” Tokarev said as quoted by the magazine.

If an investor wants to buy a stake in Transneft, he can buy preferred shares that are in free float and account for 21.45% of the company’s shareholder equity, he said.

“Russian and foreign investors already bought preferred shares, and the list of investors include several sovereign investment funds from Japan, Singapore, China, and the Persian Gulf states. At the same time, the dividends paid per one preferred share cannot be smaller than the amount of dividends on ordinary shares,” he said.

Transneft currently is not a part of the government’s privatization program as the company plays a strategic role in the oil industry and falls under the principle of equidistance from all Russian oil and gas companies, he said.

The government owns 100% of ordinary shares in the company, or a 78.55% stake in the shareholder equity.

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