Moscow. August 17. The sale of “Bashneft”, which was supposed to be one of the two main privatization transactions of the year, if not the main, ended before it began. The Finance Ministry will have to find 300 billion rubles to cover the budget deficit in other places, and “Bashneft” will remain state-owned.
“The Prime Minister has decided to postpone the privatization of “Bashneft” at a later date, it (the decision) approved by the President,” said Monday evening the press-Secretary Dmitry Medvedev Natalya Timakova.
Экономика16 Aug 2016Власти of Bashkortostan welcomed the postponement of the privatization of “Bashneft”Read more
She did not specify the reasons why such decision was made. On the surface, while only one motive – the active opposition which owns 25% shares of the company of Bashkortostan head Rustem Khamitov which in recent weeks has repeatedly appealed to the Federal government with various proposals for the future “Bashneft” (the last option is to postpone the privatization). Whether the weight of the hardware of the head of the Republic allows so successfully to defend their point of view position to center an open question, but the result, nevertheless, is obvious. Just last week, a senior Federal official said that perhaps the final decision in some degree take into consideration the position of Bashkiria, for example – the part of the government’s stake sell now, and part later. But in the end it was decided to postpone the privatization of “Bashneft” in principle.
“Rustem Khamitov supports this decision and believes it will allow for a more balanced approach to the privatization of one of the largest oil companies, including taking into account the interests of the Republic of Bashkortostan”, – said the press service of the head of Bashkiria on Tuesday evening.
The source of RBC said the reason for the decisions that the government think about the need for the sale of the company at such a low market. Also played a role, the ability to sell 19.5% of Rosneft and other companies, the source said. However, based on the logic low of the market, it is not necessary to sell “Rosneft”, but then the task of the Ministry of Finance on financing of the budget deficit (and the Agency was counting on the proceeds from privatization in 2016 about 1 trillion rubles) looks very very challenging.
The Agency does not possess information, when the question of the sale of “Bashneft” can become relevant. “At the moment we have no orders”, – said the representative of the Agency. In the “VTB Capital”, which acts as the agent of the government for the privatization of “Bashneft”, the situation does not comment.
Goods of high demand
Cancel the transaction, preparations for which have come a long way, adds to the authorities points in the eyes of adherents of consistent solutions, but removes the most confusing question around of “Bashneft” – on participation or non-participation in Rosneft’s privatization. “Rosneft” will not be possible in the near future to compete for “Bashneft”. However, private companies also.
“Bashneft”, which appeared in the Federal property in 2014, a dramatic process of nationalization, has interested many from the state-controlled “Rosneft” and the private giant LUKOIL to OAO Tatneft and little-known market “Tatneftegaz”. Of the major players from the qualifying transaction distanced only “Surgutneftegaz” (although it resources can buy the whole “Bashneft” with whatever prize more than once) and “Gazprom Neft”, which kept the status of quasi-public companies. If we leave out the discussion about eligibility to participate in the privatization of Rosneft, the main contenders for the asset was considered “LUKOIL” and “Independent oil and gas company”, founded by the ex-President “Rosneft” Edward Khudainatov.
Economy16 Aug 2016Российское the government decided to postpone the privatization of “Bashneft”Read more
In early August, there was an independent assessment of the government’s stake in Bashneft. Ernst & Young evaluated the market value of the shares of Russian property Fund in the capital of the company in 306 billion, or 3 438 thousand rubles per ordinary share (the mid-interval 297 billion 315 billion), implying a premium of 19% to the weighted average price of trading over the last three months. At the time of the withdrawal there were no signs. “VTB Capital”, as an agent, great job – a solid list of interested parties indicates a good demand,” – said a source close to the impending privatization.
Last week the Ministry of economic development submitted to the government a report on the methods of privatization of “Bashneft”. On Monday, according to the head of Rosimuschestvo Dmitry Pristanskaya, buying and selling continued. “Report number one we sent, we will have to discuss this in great detail in all the criteria. We agreed (report) as the competent authority gave a reasoned opinion”, – said the head of the Agency. “The most important criteria for the participants. Soon we will form finally, to the end of the month,” he said on Monday. The deal, according to Minister of economic development Alexei Ulyukayev, was planned to be implemented in the fall.
Rosneft, which participated in the privatization of several high-ranking officials, including presidential aide Andrei Belousov, called unacceptable, fought for the right to purchase “Bashneft” to the end – especially since neither the President nor the Prime Minister publicly about their position and not stated. Rosneft, which is not formally state – in fact a majority stake in the company owns the Agency, and holding “Rosneftegaz”, – have applied for participation in privatization. And government lawyers have reviewed the existing legislation and concluded that the process of privatization Bashneft not subject to the law “On privatization of state and municipal property”, and accordingly, restrictions on the participation of state companies and any other bidders in the privatization of the company can only be installed in a separate order or government decree.
“This is an obvious legal conflict, and its possible to solve just by signing Executive order of the government, which can set any restrictions for potential buyers,” – said the source. Now time to finally resolve the conflict in one way or the other, will be enough.