Buyer of 9% LUKoil stake may be a vehicle

Nov 09, 1999 01:00 AM

Western analysts said that Reforma, the Cypriot-registered company declared the winner of a tender for a 9% stake in LUKoil, appeared to be under the control of Russian interests.
There is information that Reforma was set up by Russian investors -- perhaps even LUKoil itself -- to bid for the share package, analysts said.
Company managers have denied reports to this effect, saying instead that Reforma was most likely a vehicle for the European investors that had expressed interest in LUKoil during a recent roadshow. A Russian press source also noted that LUKoil's American partner ARCO (the Atlantic Richfield Company) has been mentioned as a possible founder of Reforma.
However, even representatives of NIKoil -- which serves as LUKoil's investment arm in addition to owning about 25% of stock in the company directly and through LUKoil's pension fund -- told they believed that LUKoil and/or its managers were running Reforma.
Though analysts stressed that the share sale had been decidedly lacking in transparency, market observers said that investors did not appear concerned by the results of the tender. LUKoil is doing well, and its management has done a good job over the last few years, one asset manager said. As such, it is no bad thing if LUKoil managers used Reforma as a vehicle for increasing their stake in the company, he said. Another investor noted that the sale, though hardly transparent, had not served to dilute the stakes of minority shareholders.
Reforma has pledged to pay $ 200 million for the 9% interest in LUKoil and will also invest $ 240 million. The company is Russia's largest oil producer.

Source: NewsBase
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