Bashkortostan to have buyback option on Bashneft stake slated for privatization

UFA. Dec 10 (Interfax) - Bashkortostan will retain the right to buy back the stake in oil company Bashneft that it plans to offer for sale, the regional Land and Property Relations Ministry told Interfax.

Bashkortostan has decided to privatize "a portion of Bashneft shares owned by the republic that does not exceed a quarter of the stake, at the market price, providing for the option of a buyback, which will preserve the republic's right to acquire the shares after the negative consequences of sanctions in the oil production sector are overcome," the ministry said.

The decision to sell the shares was made in order to "attract investment, stimulate the development of the stock market and modernize the development of the economy amid the restrictions and sanctions imposed by the EU and United States, which have led to a drop in oil prices, as well as with the goal of preventing a decrease in the production processes and profit of oil company Bashneft, considering that increased capital expenditures and operating expenses in the current circumstances lead to the growth of production costs, and to achieve the fulfilment of social and primary obligations...," the ministry said.

It was previously reported that the Bashkortostan authorities intended to include part of the package of Bashneft shares owned by the republic in the forecast 2024-2026 plan for the privatization of republican state property. A total of 11,303,564 shares are proposed for sale, which constitutes 6.3634% of the oil company's charter capital.

Currently, Bashkortostan owns a blocking stake of 25% plus 1 share. The republic holds 44.4 million shares of Bashneft - 38.1 million ordinary shares (25.8%) and 6.3 million preferred shares (21.1%).

The controlling stake (57.66% of the charter capital) belongs to PJSC Rosneft , and Bashkortostan holds 25.000001% (over 44.408 million shares).

The charter capital of Bashneft is 177,634,501 rubles, divided into 147,846,489 ordinary shares with a nominal value of 1 ruble (83.23% of the charter capital) and 29,788,012 preferred shares with a nominal value of 1 ruble (16.77%).

Bashneft is a major vertically integrated oil company in Bashkortostan. Its activities cover oil production and refining as well as retail sales.