Deutsche Bank called “Surgutneftegas” the best candidate for the purchase of “Bashneft”

Deutsche Bank called “Surgutneftegas” the best candidate for the purchase of “Bashneft”


Moscow. May 24. Silence “Surgutneftegaz” about a possible interest in the privatization of “Bashneft” does not mean that the company will not participate, analysts say Deutsche Bank.

“We believe the company is” the best candidate for the privatization of “Bashneft”, – said in the review of the Bank. “Cash cushion “Surgutneftegaz” in the $35 billion will allow the company to maintain a very strong balance sheet even after paying out $4-5 billion for Bashneft. “Surgutneftegaz” also will be able to significantly improve its vertical integration and generate the best synergy out of all the Russian oil companies by oil refinery “Bashneft”. The government would be happy to keep the “Bashneft” on the hook at the expense of loyalty to the state “Surgutneftegaz” – write analysts at Deutsche Bank.

A potential victory of the “Surgutneftegaz” promises (minority) shareholders of “Bashneft” no benefit, but they will probably propose a share buyback, said Deutsche Bank.

Analysts believe that the company is” very pragmatic company, and it is not stating public interest in “Bashneft”, can “quietly count your chances and to wait for the official announcement of the terms of privatization. The state really need the money, and “Surgutneftegaz” can introduce competition or its visibility in the privatization process. Moreover, Surgutneftegaz could win, written by experts.

“Market capitalisation “Surgutneftegaz” currently stands at $23 billion, below the $35 billion the funds held in the company’s balance sheet. We believe that successful participation in the privatization of “Bashneft” will improve the market rating of “Surgutneftegaz” and will be the catalyst for the growth of quotations of its shares”, – stated in the review.

Currently it is officially known of the two candidates for the state-owned stake of “Bashneft” LUKOIL and Independent oil company (“NOC”). About two applicants wrote to the media. It – business Hotiny, as well as an unknown company in the market “Tatneftegaz”, which has offered to lend the state-owned stake for temporary use.

In February it was reported that at present Russia is the owner of 50.08% of shares of “Bashneft”, Bashkortostan – 25% plus one share. In the list of strategic enterprises and strategic joint companies approved by decree of the President on the fourth of August 2004 included 50% plus one share of the company. The forecast plan of privatization of mediasanta for 2014-2016, approved by government in 2013, did not provide for a reduction in the share of Russia in the authorized capital of “Bashneft”.