PRESS: Sistema may sell beneficial stake in Grenada’s GPG

MOSCOW, Nov 30 (PRIME) -- Russian multi-industry holding Sistema is considering selling its beneficial stake in Global Petroleum Group (GPG) that produces oil and gas in the shelf zone of Grenada partially or fully, Vedomosti business daily reported on Friday quoting Sistema’s core owner Vladimir Yevtushenkov as saying.

He did not elaborate, but sources said that Sistema is discussing the deal with Chinese buyers among others, and that one large Chinese fund was interested in the asset. A source familiar with Sistema’s management said that it was still unclear whether the company would sell its entire stake or part of it, and that much depends on offers.

In 2013, Sistema’s Cyprus unit bought 50% in Multiple Investments, which controls GPG that has the only license for production of hydrocarbons in Grenada’s shelf zone. Later Sistema issued two loans to GPG to support exploration and drilling – an unsecured U.S. $69.2 million loan and a $100 million loan secured by a 19% stake in GPG.

Consulting company DeGolyer estimated reserves of GPG in 400 billion cubic meters of natural gas in August 2018, and the cost of its project at $774 million, so Sistema may sell its stake in GPG for a maximum price of $534 million, Vedomosti said.

Fitch Rating’s analyst Dmitry Marinchenko said that the company has primarily gas reserves, which are tougher to monetize than oil. If the reserves are proven, an owner of the asset will have to find a buyer for the gas and to raise banking financing for the project. It takes time, so the asset will have to be sold with a large discount if it is unclear who would buy the gas, Marinchenko said.

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