PRESS: Rosneft still plans to partake in Bashneft’s privatization

MOSCOW, Aug 10 (PRIME) -- Russian state-run oil major Rosneft still plans to participate in privatization of oil company Bashneft, business daily Vedomosti reported Wednesday citing Rosneft CEO Igor Sechin.

Last week, Economic Development Minister Alexei Ulyukayev said that Rosneft had bid for Bashneft, but it is very unlikely that it will end on a short list of contenders as the company is an inappropriate buyer. On Monday, Energy Minister Alexander Novak said he agreed with Ulyukayev’s position.

“Did the government issue a directive for us forbidding our participation in privatization? No, it didn’t,” Sechin told Vedomosti when asked whether the company plans to recall its bid after Ulyukayev’s statement.

In his letter to Ulyukayev, Sechin said that technically Rosneft is not a state company, and the rejection of its bid will have negative consequences for it, including a lower investment attractiveness, value and rating. It may also create risks of minority owners rights violation who may sue members of Rosneft’s board of directors seeking redemption of losses.

Sechin expects a 160 billion ruble synergy effect from the purchase of Bashneft. It will also support plans to privatize a stake in Rosneft with a premium to the current market value, he said.

A representative for the Economic Development Ministry told the business daily that Sechin’s letter is under consideration.

A government official said that no directive will be approved on the issue. “There is a common position that Rosneft should not participate in this privatization, and there are legal ways to implement this non-participation,” the official said.

President Vladimir Putin earlier authorized the sale of the entire government’s stake in Bashneft to a private investor. The Federal State Property Management Agency owns 50.08% in the company, while the government of the republic of Bashkortostan has a 25% stake.

On August 5, First Deputy Prime Minister Igor Shuvalov said that the value of Russia’s government 50% stake in the oil company was estimated at 297–315 billion rubles. The starting price at the sale can be set at 306 billion rubles.

(64.7848 rubles – U.S. $1)

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