Rosneft President Igor Sechin has named the price of a bloc of shares of the company owned by the state, which could be sold during the privatization. 19.5% shares of the company could be sold for $16.8 billion.
“Would you like to buy the shares? I could say that the shares will cost about $8.12 per share, no less. There is no limit, because this is the price of the deal for the long-term investors,” RIA Novosti quoted Sechin as saying.
Rosneft’s authorized capital has been divided into 10,598,000,000 shares. Therefore, $19.5% of the company’s shares will cost the buyer about $16.8 billion.
Sechin most likely based the price on the price BP bought Rosneft’s shares two years ago, said Aleksei Kokin, senior analyst of Uralsib Capital. That time the bloc of about 20% shares was purchased by BP for $8.00 per share, he added.
But the analyst added that in 2012, when the deal was closed, the conditions were different: oil priced was higher and there were no sanctions. “The structure of the deal was more complex,” said analyst.
He said in 2012 the bonus was 12%, but now it will be more than 50% from sale of 19.5% shares.
“In this situation the bloc of shares could be bought by China, which does not support the sanctions and could benefit from the deal in the future. I do not think that the government will agree to this deal, because Russian companies are already very dependent on China,” Kokin said.
According to his forecasts, by the end of 2014 the cost of Rosneft’s shares could be $7.4 per share. This is a target price, we have not changed the forecasts yet, because it is not clear how low it could get. But is clear even now that it will go down during a year,” added the analyst.
In May 2014 Russian Finance Minister Anton Siluanov said that the government could sell part of its packet in Rosneft both wholly or in parts quickly, because of deficiency of budget revenues.
