A complex case: how did you prepare for the privatization of “Bashneft”


August 2005. After AFK Sistema became the owner of a blocking stake in Bashneft, its leaders stressed that investments are exclusively in nature of portfolio, and the shares may be sold in a few years. In particular, the Vice-President “Systems” Levan Vasadze stated that the company would get 75% of the “Bashkir capital” under which was “Bashneft”, and after 1.5—2 years the shares could be sold. “Rosneft” and “Gazprom” were then called one of the most likely candidates for the Bashkir oil assets, Rosneft confirms interest to them.

The President “Rosneft” Sergey Bogdanchikov: “Bashkir refineries we look, they are even better Yukos assets” (“Kommersant”, July 2006).

June 2013. In June 2013 the newspaper “Vedomosti”, citing its own sources reported about interest of “Rosneft” for purchase of “Bashneft”. Sechin, who took the time CEO of the company, called the question on the purchase of “Bashneft” “interesting,” but said it was not discussed.

“Bashneft” develops deposits in the Volga-Ural oil and gas province, Timan-Pechora basin and Western Siberia, a total of 194 field (175 in service). From 2009 to 2014 the company increased oil production by 40%. Oil refining is being done by three refineries located in Bashkiria. The company also includes a network of filling stations (private and 582 220 affiliate stations by the end of 2014).

July 2013. Head of the Board of Directors of AFK “Sistema” Vladimir Yevtushenko said that “Bashneft” can indeed be sold to a strategic partner or its shares may be placed on the market.

The head of Board of Directors AFK “System” Vladimir Yevtushenkov: “In business there is no word “no” all depends on the price. When a businessman says it’s not for sale, then it ceases to be a businessman” (Bloomberg)

August 2013. TASS reported that AFK Sistema plans to sell Bashneft and out of the oil business. The most likely buyer of the oil company sources Agency called the Independent oil and gas company (NOC) Eduard Khudainatov. However, the head of “Bashneft” Alexander Korsik said that Yevtushenkov is not thinking about selling the company. At the same time the President of “Sistema” Mikhail Shamolin said that the company intends to independently develop the asset and can hold IPO in 2014-2015.

March 2014. “Bashneft” bought for $1 billion Tyumen oil company “Burneftegaz” Oleg Burlakov claimed as “Gazprom Neft” and “Rosneft”. Based on the amount of reserves it is estimated almost twice cheaper than trading itself “Bashneft”.

July 2014. Basmanny court has arrested nearly 100% of the shares of “Bashneft” under control AFK “System” in a criminal case on the privatization of the oil company. The head of “System” Yevtushenkov was summoned for questioning, and he said that he regarded the events as a hostile takeover.

September 2014. Igor Sechin said that Rosneft never considered buying shares of JSC “Bashneft” because of “skeletons in the closet” and the risks of privatisation of this asset.

The head of “Rosneft” Igor Sechin: “the Market knew about the skeletons in the closet for a long time. That is why we have never considered the possibility of buying this asset. But Vladimir Evtushenkov is a very wise man, experienced businessman. I think he weighed all the risks when taking the decision to purchase” (Bloomberg)

October 2014. The arbitration court of Moscow ruled for the recovery of the property of the state 81,67% stake in Bashneft, and in December AFK “System” gave a 73.9% stake in OAO Bashneft to the Russian Federation represented by Rosimushchestvo. The power of talking about re-privatization of “Bashneft”. Energy Minister Novak at the APEC summit, called the decision “logical”.

2015. Rosneft has announced that it has received an offer to purchase 50.1% of shares of “Bashneft”, although the law on privatization of state and municipal property prohibits to participate in the privatization of companies with the share of state participation of 25% or more. Thus, under the ban on participation in privatization subject to “Gazprom”, “Rosneft” and the Russian direct investment FUND.

February 2016. The Minister of economic development Alexei Ulyukayev said there are three companies that are most likely to be privatized later this year: “Rosneft”, “Bashneft” and ALROSA. At that time the government owned 75.1% of Bashneft — 50% from the Federal government and 25.1% — in the government of Bashkiria. Key terms large-scale privatization 1 February at the meeting with members of the government called Russian President Vladimir Putin. He demanded that potential buyers were in the Russian jurisdiction and are not borrowed money from the banks, and the deal was “as transparent as possible for their members and for the public.”

March 2016. The desire to participate in the privatization of “Bashneft” said the former head of “Rosneft”, the owner of an Independent oil and gas company (NOC) Eduard khudainatov. According to the newspaper “Vedomosti”, he appealed to President Vladimir Putin a letter in which he announced the willingness of NOCS to participate in the privatization of “Bashneft”.

April 2016. The head and principal owner of LUKOIL Vagit Alekperov said that the company is interested in buying shares of the Federal government in “Bashneft”. The sources pointed out that the company expressed willingness to buy all of 75.1% of shares of “Bashneft” with a substantial premium to the market.

May 2016. President Vladimir Putin on 17 may expelled “Bashneft” from the list of strategic enterprises and strategic joint-stock companies, making possible the privatization of state shares.

July 2016. “Rosneft” received from “VTB Capital”, which is an agent for the sale of the state stake in Bashneft, an offer to acquire 50.1% of the shares of the company. In February 2016, the press Secretary of”Rosneft” Mikhail Leontiev claimed that she is not interested in this asset. “How can one state-owned company to buy another?”, — he said then. “ru” reported that among received offers from “Vtbcapital” was also Total, Sinopec, Shell, BP, Statoil, Eni, ONGC, Oil India, the Arab Fund Mubadala, as well as Chinese funds Silk Road Fund and CIC.

Deputy Prime Minister Arkady Dvorkovich: “it Was decided not to allow to participate in the privatization of state-controlled companies, and this includes both direct control and indirect”. (Vedomosti, July 28)

July 25, 2016. “VTB the Capital” has declared that interest to purchase of the asset is expressed by four companies: Rosneft, LUKOIL, NOCS and Antipinsky oil refinery. The newspaper “Kommersant” reported that applications also filed Rossiiskie direct investment (RDIF), “Tatneft” and the Foundation “Energy”.

The Minister of economic development Alexei Ulyukayev: “From my point of view, “Rosneft” — the wrong buyer for this asset.” (“RIA Novosti”)

August 2016. Deputy Prime Minister Igor Shuvalov said that the privatization of “Bashneft” the state intends to obtain $3 billion. Therefore, the preliminary assessment announced by the government, came lower than the market value of almost 26%.

The Minister of economic development Alexei Ulyukayev: “state-owned companies should not be involved in privatization.” (“RIA Novosti”)

Bloomberg, citing its sources reported that the head of “Rosneft” Igor Sechin asked the government the following scheme: Rosneft is buying control of Bashneft for $5bn (315,79 billion at Friday’s exchange rate), and then Rosneftegaz sells 19.5% of “Rosneft”for $11 billion (693,74 bn). The Minister of economic development Alexei Ulyukayev called the rating of 19.5% of “Rosneft” in $11 billion is “close to reality”.

16 August 2016. Sources in the government said that the privatization of “Bashneft” will be postponed. One of the reasons was a letter of the head of Bashkiria Rustem Khamitov, who asked not to be privatized this year “Bashneft” or to reduce the government stake to 25%, the company continued to fulfill its social obligations to the Republic. Khamitov in an interview claimed that in 3-4 years the company can cost more than $10 billion.

The head of Bashkortostan Rustem Khamitov: “Bashneft” for the Republic even more than “Bashneft”, so to speak. The company generates and the economic potential of the Republic. Almost 30% of revenues of the consolidated budget of the Republic of Bashkortostan is Bashneft ()

September 30, 2016. First Deputy Prime Minister Igor Shuvalov said that the government resumed the privatization of”Bashneft” and “Rosneft” will be allowed to participate in the transaction. Then in “Rosneft” have confirmed the continued interest in the privatization package of the Federal government.

The Minister of economic development Alexei Ulyukayev: “From the point of view of the law on privatization 174 there is a textual rule that in the event that the transaction is in the interests of stock market development, technology and so on, it is not subject to the requirement that the company, which has 25% or more [government involvement] is not allowed. Technically, under this provision, as well as from the fact that, formally, directly, it [Rosneft] is a state, but through a “layer”, that is “Rosneftegaz”, — formally, it is allowed [for privatization of “Bashneft”]”. (“RIA Novosti”)

10 Oct 2016. The head of the government Dmitry Medvedev has signed a decree on the sale 50,0755% of the shares of the company “Bashneft”, “Rosneft”. The sum of transaction, according to him, will be 329,69 billion rubles After that, LUKOIL said that the amount, which was valued the government’s stake in Bashneft was too high for the company.

12 Oct 2016. “Rosneft” by not filing the petition to the FAS, entered into a contract for the sale of “Bashneft” and paid 329,7 billion RUB, the Entire amount entered in the budget of Russia. “We needed to quickly transfer the money in the budget, we made it”, — said the press-Secretary of Rosneft Mikhail Leontyev.

November 14 was detained by the Minister of economic development Alexei Ulyukayev. The detention occurred at the time of transfer of a bribe of $2 million for a positive evaluation of the deal for the privatization of “Bashneft”, “Rosneft”. The case was initiated under article “receiving a bribe in especially large size” (part 6, item 290 of the criminal code). Four main questions about the arrest of the speaker — in the material .

 

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