PRESS: Russia allows Gazprom to buy back its shares from VEB

MOSCOW, May 6 (PRIME) -- The Russian government has agreed with a draft ruling to gas giant Gazprom’s board of directors under which the company is to buy back 2.7% of its shares from state development bank Vnesheconombank (VEB), Kommersant business daily reported Friday citing sources close to the government, VEB, and Gazprom.

VEB may receive at least U.S. $1.57 billion from the buyback given the current market price. VEB bought the stake in late 2010 from E.ON, and the German company’s data show that the stake could have cost about $3.5 billion.

The government may order Gazprom to pay E.ON’s price for the stake, or about 231 billion rubles, in order to improve VEB’s position at the expense of the gas giant, Kommersant reported.

The business daily also quoted Bloomberg as saying that Gazprom used the possible deal with VEB as an argument for exemption from a recent ruling to pay at least half of net profit under International Financial Reporting Standards in dividends for 2015.

Moreover, VEB sped up its search for buyers for metals and mining assets which it controls as a creditor – Ukraine’s Industrial Union of Donbass and Russia’s Sibuglemet, which is technically operated by U.K.-based steel and mining giant Evraz.

VEB CEO Sergei Gorkov is negotiating the sales with almost every player on the Russian and Ukrainian markets and with financial institutions. But it will be difficult to find a buyer for these troubled assets, the business daily reported.

(65.8918 rubles – U.S. $1)

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