Gov't reports to Putin on preparation process for privatization of 19.5% of Rosneft
MOSCOW. Dec 8 (Interfax) - The government has reported to Russian President Vladimir Putin on the preparation process for the sale of the 19.5% stake in Rosneft belonging to Rosneftegaz.
A letter on disposing of Rosneft shares was signed by Russia's First Deputy Prime Minister Igor Shuvalov and sent to Putin on Friday, December 5, a source from the government's financial block told Interfax. This includes a report on the progress of a presidential order issued to the government following a meeting on the budget and tax policy for 2015-2017. At the time, Putin tasked the government with ensuring that the budget had revenues in 2015 from the sale of Rosneft shares if they can be sold at a price above that of the 2006 IPO.
The letter says that the government issued an order on November 27 concerning the privatization of 19.5% of Rosneft. The order authorizes the sale of up to 2,066,727,473 shares in the oil company for a price above its 2006 IPO.
"The Economic Development Ministry and Rosimuschestvo will provide the necessary arrangements for OJSC Rosneftegaz to make corporate decisions in accordance with Russian legislation, including agreeing on Rosneftegaz's proposals on the price and timeframe for getting rid of the Rosneft shares," the source told Interfax, citing the letter.
Rosneft carried out an IPO in July 2006, earning $10.6 billion for 15% of shares. The price per share in the IPO was $7.55. The current price of Rosneft's shares is 222.6 rubles, which is comparable to the ruble-denominated price at the time of the IPO; however, the depreciation of the ruble has led to the fact that Rosneft's shares in dollars are considerably below what they were in 2006 (around $4.2 per share at the current exchange rate). Economic Development Minister Alexei Ulyukayev said in November that he believed it was possible to use the price in forex in the upcoming deal.