Moscow set to go ahead with sale of LUKoil, Gazprom stakes

Aug 30, 1999 02:00 AM

Representatives of the Russian government and LUKoil said that they expected plans for the sale of a 9% stake in the oil company to be approved by the end of the year.
The sale of the state-owned stock may bring in as much as $ 489.1 million, said Igor Shuvalov, chairman of the Federal Property Fund.
Shuvalov further said that all necessary preparations for the sale had been made. All that is needed now is the prime minister's approval, he remarked, adding that a resolution on the sale would probably be issued the following week. The starting price of the stake will not be set until the sale is officially authorised, he added.
Moscow had hoped to sell the LUKoil stake last year but had to put its plans on hold due to the market turmoil that followed devaluation of the rubles and default on GKO and OFZ treasury bonds. Government officials said earlier this year that they wanted to sell the stake by September of 1999, but those plans were delayed as a result of government reshuffles.
Also last week, Russia's State Property Minister Farit Gazizullin announced that 3.37% of shares in Gazprom would be put up for sale. This would take the government's share in the gas monopoly down to 35%, the minimum allowable level under current law. A 2.5% share will be taken out of the State Property Ministry's holdings in Gazprom, while 0.87% will come out of the Federal Property Fund's holdings.
Shuvalov also stated that Moscow would not go ahead with an earlier plan to test investors' sentiments by selling 0.5% of Gazprom in four small lots of 0.125% each.Gazizullin did not offer any further information on the Gazprom sale, but Shuvalov stated that it would not take place until the price of the company's American Depository Shares (ADSs) rose to $ 11.5. At the beginning of trading last in London last Thursday, the ADSs were listed at $ 8.525.
Moscow will approach Germany's Ruhrgas, Italy's ENI and Royal Dutch/Shell, all of which are already co-operating with Gazprom in some fashion, about bidding for the shares, he added, without elaborating.

Source: NewsBase
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