Yeltsin decree may clear the way for further sales of Gazprom stock

Aug 12, 1999 02:00 AM

On August 9, Russian President Boris Yeltsin signed a decree fixing the minimum state share in Gazprom, the natural gas monopoly company, at 35%.
The decree states that the government's share in Gazprom must be maintained at 35% or more in order to ensure economic security and protect Russia's strategic commercial interests. It also states that Moscow will retain ownership of its entire stake in Gazprom until a decision on disposal of any part of that stake is made.
Until late last year, the Russian government owned a little more than 40% of Gazprom. But in December of 1998, its stake dropped to 38.37% following the sale of a 2.5% interest to Ruhrgas. (The German company paid $ 660 million for the shares.) Government officials said after the sale that Moscow planned to sell off another 2.5% of stock in the company. However, the sale has been delayed indefinitely pending improvement in market conditions.
Earlier this summer, Russian officials said they wanted to test the market by offering 0.5% of shares in the company to investors. The shares would be sold in four lots of 0.125% apiece, they said.
It is not clear whether the decree signed by Yeltsin on August 9 gives permission for the sale of either 2.5% or 0.5%. Russian government officials, for their part, have refused to comment on the matter. However, Western analysts said that the document would at least clear the way for the sales.
One Russian commentator speculated that the government would not sell any more Gazprom stock before parliamentary elections, scheduled for later this year, since the sale of such a strategic asset might provoke an outcry among opposition leaders. However, the commentator said, once the parliamentary elections are safely past, Moscow may sell in order to maximise its revenues ahead of the presidential elections, scheduled for the summer of 2000.

Source: NewsBase
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