Sidanko takes further step toward expected merger with TNK

Aug 01, 2000 02:00 AM

Russian Sidanko has taken another step toward an expected merger with TNK by announcing the completion of a deal with the domestic Tyumen Oil Company (TNK) involving TNK taking a 25 % plus one share stake in Sidanko by Oct. 15. Any merger, however, depends on the position of Sidanko's main shareholder, BP, which is now reluctant to talk about any merger with TNK.
Sidanko recently announced it would hold an EGM on Aug. 25 to approve an additional share issue to be used for the deal with TNK. Under an agreement reached last December, TNK is expected to receive a 25 % plus one share stake in Sidanko in exchange for the return of domestic oil producer Chernogorneft to Sidanko.
Chernogorneft was purchased by TNK last year at a bankruptcy auction. Sidanko's value was reduced by the lost of Chernogorneft, oil producer Vanyeganneftegas and bankruptcy proceedings against its oil unit Varyeganneftegas. Sidanko shareholders said they believed that the company's value would increase after Chernogorneft's return.

TNK and its owners, Russian Alfa Group and the Swiss-based Access/ Renova firm, have repeatedly said their target was to have BP as a strategic partner for TNK. Last year, TNK moved closer to its goal by having made BP change its attitude towards TNK from opposing it to tolerating it.
Moreover, market sources say BP and TNK have become close partners in the Rusiya Petroleum joint venture, the operator of the East Siberian Kovykta gas field. Both companies are Rusiya's shareholders.
Analysts suggest BP and TNK may agree in the near future on the joint development of the Samotlor field in West Siberia. The parties have recently carried out a study assessing the possibilities of joining up the north and the south part of the field.
"TNK is ready to demonstrate its readiness to cooperate by all means to BP and other main Sidanko shareholders (Russian Interros Group and offshore-registered Kantupan Holdings)," an oil analyst at a Moscow-based investment bank said. Meanwhile, TNK is unlikely to play the role of a "junior partner to BP." Last month, TNK said it was seeking a merger through converting TNK and Sidanko shares into a single share. "I think TNK will seek at least the role of an equal partner to BP in the merged company," the analyst said.

BP officials are very cautious about TNK's moves saying the latter's statements about a possible merger are fiction. Meanwhile, last year, BP could not believe it would start sometime any talks with TNK, which BP accused of illegal methods in purchasing Chernogorneft.
Interros has turned out to be more tolerant toward TNK. Interros Chairman Vladimir Potanin said if the merger were efficient he would not block it. "Potanin is generally not interested in his oil assets and I do not rule out that he may sell Interros' stake in Sidanko after he gets it back from Uneximbank's creditors," the analyst said. Uneximbank is an Interros subsidiary.
Several years ago, Iterros handed over its 44 % stake in Sidanko to a group of western banks as collateral for loans. Potanin said he believed the creditors would agree on the Sidanko share issue to let TNK into Sidanko. Oil analysts say a merger between Sidanko and TNK may become realistic if TNK's competitors do not prevent the move.

Source: Bridge News via Newspage
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