Moscow. 11 Oct. “Rosneft” does not lose a minute – another it absorbs the asset, perhaps, breaking all records for speed. Yet only on Monday signed a decree on purchase by “Rosneft” 50,0755% of shares of “Bashneft”, as already on Wednesday evening, a few days before prescribed by the government’s deadline, the deal closed and on Thursday announced a complete change of leadership of the company.
Affects a lot of experience of “Rosneft” in the market of oil & was first YUKOS, then TNK-BP. Against the background of these giants with a small and compact “Bashneft” in General there should be no problems. The interlocutors agree that it needs to “change the government” – is to quickly enter into all the business processes of an absorbed object. Yes, and most of “Bashneft” this will benefit the company since February lives in a state of tension because of the uncertainty in connection with the privatization. Now placed all points above i.
Moreover, the answers to the main questions – politics in the transaction by Bashneft, which gave President Vladimir Putin in September. And on Wednesday, he convincingly supported the correctness of the chosen course.
Corsica on Shishkin
The medium was removed, perhaps the last the intrigue around of “Bashneft” – the change of top management, which naturally kept in suspense the company’s staff in Moscow and in Bashkortostan. Though, probably, such a swiftness no one had expected. Tuesday afternoon employees of Bashneft was just speculating about when it can be replaced by the user, not knowing that on Tuesday evening will begin active work on its update.
Sources on Wednesday morning announced the planned resignation of the President “Bashneft” Alexander Corsica, who has headed the company ever since “last” shareholder – AFK “System”, a complete change of the composition of the Board and convocation of an extraordinary meeting of the shareholders for the election of a new Board of Directors. Then came the message of the company with the agenda of the meeting of Council scheduled for October 13, at the same points. It is clear that he could not long remain secret in the name of the new head of “Bashneft” – the sources told ANI that they can be assigned to the Vice-President of “Rosneft” on power and localization Andrey Shishkin.
The market did not expect that Corsica will remain in the “Bashneft” after to enter “Rosneft” – even at the information level it is difficult to be called a supporter of the sale of Bashneft in favor of “Rosneft”. It Korsik actively promoted the idea of SPO in the framework of privatization and openly called “LUKOIL”the best Challenger for the state. The company’s team at the Corsica continued to work, despite the increasing uncertainty: in recent years, Bashneft has shown a major increase in performance, and the growth rate of oil production for a long time occupies a leading position.
Culminating in the presidency of Corsica in Bashneft lasted more than five years and withstood two shareholders – first businessman Vladimir Yevtushenkov, then state ownership. To “Bashneft” in the biography of Corsica was the management of Sibneft, RussNeft, “ITERA”.
About his plans after “Bashneft” it does not apply. “Nothing planned,” said Corsica.
Presidential candidate of “Bashneft” Andrey Shishkin works in “Rosneft” since 2012. Initially held the position of Vice President for energy, industrial safety, labour protection and ecology, and in 2014 he became Vice-President for energy and localization from April 2015 – member of the management Board of Rosneft. To work in the largest oil company of Russia, Alexander Shishkin has held senior positions in various financial institutions and companies in the fuel and energy sector, and was the Deputy head of the Ministry of energy.
Agency sources also reported that the Board of Bashneft will be replaced completely, after 13 October, the governing body will include only the representatives of “Rosneft”.
The deal closed
The acquisition of a controlling stake in Bashneft completed, announced Wednesday evening “Rosneft”. On account of the Federal Treasury “Rosneft” transferred 329,7 billion rubles for the purchase of a controlling stake of “Bashneft”.
The Minister of economic development Alexei Ulyukayev said that Rosneft offered for a controlling stake in Bashneft to 20.6% premium to the closing price on the day of receiving binding offers. According to him, in the process of preparation of the transaction has received two binding offers from potential buyers of shares, a price higher than the value determined by the appraiser, offered only “Rosneft”.
Rosneft is the only company that submitted on the consultant’s proposal – “VTB Capital” – a legally binding offer with a price higher than the valuation of an independent appraiser from 297 billion to 315 billion roubles. The second company, which had submitted a binding bid, with the price slightly lower,” – said the Minister.
The head of VTB Andrey Kostin told reporters that the Bank consultant was considering “different scenarios”, but offered “Rosneft” the price was high.
The acquisition of government’s stake in Bashneft will not only “to preserve the integrity of the assets” of the company, but also to “maximize the synergies from combining the assets of both companies, will support the plans for privatization of shares of JSC “NK “Rosneft” 19,5% “, – quotes the Ministry of words of the speaker.
“Consultant “Rosneft” Bank Intesa argued synergy in the following way: first of all, it is recycling, because part of the crude oil produced by Rosneft, processed “Bashneft”, there is the optimization of the oil flow, there is a major savings. Another important aspect is the synergy that arises from the integrated development of fields that now belong to the “Rosneft” and “Bashneft”. I think that here there is an effect, which they estimated at from 150 to 180 billion rubles. Accordingly, this increases the value of the asset itself “Rosneft”, – said Ulyukayev.
He added that the Ministry together with “Rosneftegaz” complete preparations to sell 19.5% of Rosneft shares for the implementation of the transaction in 2016.
Putin surprised, but I’m sure
Vladimir Putin, commenting on the theme of privatization in the course of the investment forum “VTB Capital” “Russia calls!”, said that was surprised by the government’s decision to sell Bashneft to Rosneft, hinting thereby exhausting the discussion on the law of the state-owned company to acquire the asset from the state.
“Maybe this will sound strange, I myself was surprised at this position of the government. But is it really the government’s position – primarily its financial and economic block,” he said.
The surprise of the President of Russia can be understood: first, was the start of privatization of “Bashneft”, which were claimed as the deal of the year in the oil industry, the flagship public sale and warranty revenues. But then the question arose – can a “company with state participation”, which is for Rosneft to take part in this privatization. And then the movement stalled, the participants were puzzled, froze in incomprehension as a result, Prime Minister Dmitry Medvedev had indefinitely a deal for Bashneft to be postponed.
Again started the process of privatization of “Bashneft” also Dmitry Medvedev – now the wheel has already spun in a particular direction, and it became clear that one member of the movement. Rosneft, the package of which 19.5% is also being prepared for privatization, and which considers the possibility to purchase their stocks too.
On Wednesday Vladimir Putin gave a comprehensive explanation: the price of a privatization package of Rosneft will increase after the acquisition of “Bashneft”. He recalled that “Rosneft” has offered “Bashneft” the highest price – 330 billion rubles. “This is somewhat higher than estimates that were made by independent international experts. She offered a price above the market,” he said.
Pre-sale preparation of “Bashneft”
In October 2014 “Bashneft”, the control package of which in 2009 belonged to AFK Sistema, the court became the property of the state. The court decided that the shares of Bashkir fuel and Energy sector in 1990-e years were illegally set in regional ownership, and therefore all subsequent transactions with them were null and void.
However, the court did not require AFK dividends received by a Corporation during the years of corporate ownership of Bisteca – about 120 billion roubles. Moreover, AFC sued of 70.7 billion rubles from the seller assets of OOO “Ural-invest”, which is affiliated with the family of former President of Bashkortostan Murtaza Rakhimov. However, the President “Systems” Alexander Evtushenko managed to hold under house arrest for three months.
May 17, 2016, it was announced that President Vladimir Putin has signed the decree about an exception of 50% plus one share of JSC “Bashneft” from the list of strategic enterprises. Thus, the state-owned shares “Bashneft” became available for privatization. Active preparation to privatization of “Bashneft” began in mid-July, but in late August the sale of the company, which was to become one of the major privatization deals of the year, was postponed indefinitely.
One possible reason for the postponement of the sale of state called the government’s reluctance to sell the asset at a low market. In addition, an active opponent of the sale of state shares in Bashneft is the head of Bashkortostan Rustem Khamitov (Bashkiria owns 25% of “Bashneft”) – there were concerns about a possible rejection of one’s own brand.
In August it became known that the head of “Rosneft” Igor Sechin asked the government to give an opportunity to a controlled company to acquire control in Bashneft for $5 billion with a premium to the market.
Competitors Of Rosneft
As reported by the Minister of economic development Alexei Ulyukayev, Rosneft is the only company that has made a legally binding offer to purchase the shares of Bashneft at a price above the value determined by the appraiser. According to an independent valuation by Ernst&Young, the government’s stake in Bashneft in August was estimated in the range from 297 billion to 315 billion rubles.
The proceeds from the sale of shares must be received in the budget this year. “You know that the income one way or another we have taken into account when determining the revenue base of the country’s budget for the current year. We recently discussed the measures of budget consolidation, in raising more revenue. Including in the framework of this work and made the decision to sell a controlling stake in the joint-stock company “Bashneft”, – commented Dmitry Medvedev its decree on the sale of “Rosneft” shares “Bashneft”.
However, earlier among applicants for “Bashneft” was called “LUKOIL”, “Rosneft” and “Independent oil and gas company”, founded by the ex-President “Rosneft” Edward Khudainatov and other structures. After it became known about the transaction with “Rosneft” Vice-President “LUKOIL” Leonid Fedun said that the company refused to buy because of high prices.
“The price of $5 billion for Bashneft high for “LUKOIL”, – said a top Manager. Other companies cited over the number of applicants for the purchase of “Bashneft”, the transaction is not publicly commented.
After the already mentioned entry in the budget of 329 billion 690 million rubles from the sale of state-owned stake of “Bashneft” plans to privatize 19.5% of Rosneft shares. Following the sale of shares of both companies, the government intends to raise more than 1 trillion rubles. As explained at the end of September the first Deputy Prime Minister Igor Shuvalov, these transactions will greatly improve the macroeconomic indicators, as funds from privatization of “Rosneft” will be counted in the Federal budget as budget revenues and from the sale of “Bashneft” as a source of covering the deficit of the Federal budget.
While it is not clear yet who will qualify for the purchase of shares of “Rosneft”. Vice-President of the company Mikhail Leontyev said that Rosneft is seriously considering the purchase of its shares from Rosneftegaz (the state-owned holding that owns the control of “Rosneft”), as it sees great potential of growth of capitalization. Later Alexei Ulyukayev said that the timetable for the privatization of “Rosneft” yet does not involve a redemption by the company of its shares. The head of the state company Igor Sechin on 10 October reported that “Rosneft” will consider the interests of their shareholders when deciding on the redemption of its shares as part of privatization.
“We will make the decision that meets the interests of our shareholders,” said Sechin to reporters in Istanbul, responding to a question about the number of shares offered for sale under the privatization program, can buy the company itself.