Economy Ministry gives reasons for Gazprom and Rosneft’s review

Deputy Economic Development and Trade Minister Andrey Sharonov considers normal the situation when different appraisers are invited to assess the assets of Gazprom and Rosneft by the government and the companies.
According to Mr Sharonov, the decision of the Economic Development and Trade Ministry to carry out its own assessment is connected with the government’s wish "to solve the problem by an efficient means and, to put it mildly, not to sell too cheap."
"We do not feel disposed to make an assessment that would annoy Gazprom," Mr Sharonov underlined.

At the same time, the representative of the ministry refused to anticipate the results of the assessment. However, he pointed out that if the assessments made by the banks Dresdner Kleinwort Wasserstein and Morgan Stanley concurred, the government would receive "a double confirmation." Otherwise, a decision will be made depending on the situation.
In addition, Mr Sharonov agreed with the position of the Russian Federal Agency for Managing Federal Property, according to which it would be necessary to establish a federal enterprise so as to carry out Gazprom and Rosneft’s merger. However, the representative of the Economic Development and Trade Ministry stressed that the government did not have an official position on this matter.

The assessment of the assets of Gazprom and Rosneft is necessary for the implementation of a deal on increasing a state stake in Gazprom to a controlling stake. As a result of swapping 100 % of the shares in Rosneft for 10.7 % of the shares in Gazprom, which are on the balance of its subsidiaries, the state stake in the gas holding will advance to 50 % plus one share.
Gazprom’s management chose Dresdner Kleinwort Wasserstein (DrKW), Deutsche Bank and Citibank as its appraisers. In order to fulfil this task, three separate groups of specialists will be established with DrKW: to assess Rosneft’s assets, to assess the cost of Gazprom’s shares and to prepare the structure of the deal. Deutsche Bank and Citibank will prepare a fairness opinion independently of one another.

At the same time, the Federal Agency for Managing Federal Property declared that Morgan Stanley and the consulting group 2K Audit-Business Consultations had been chosen as consultants for Gazprom and Rosneft’s merger.
The consultants were hired to assess the cost of Gazprom and Rosneft’s shares, to prepare necessary conclusions as well as to carry out other consulting services in the context of privatising Rosneft’s shares and the expected deal with Gazprom’s shares.