ST. PETERSBURG, May 18 (RIA Novosti) - Rosneft, a Russian state-owned oil company, will make its initial public offering when the right conditions are in place, the minister of industry and energy said Thursday.
"It is always important to act when the market situation is favorable and risks are low to achieve the best results," Viktor Khristenko said when asked whether Rosneft would IPO this year.
Kirill Androsov, a deputy economic development and trade minister, said previously that Rosneft would issue additional shares and sell existing shares under a single initial public offering in the third or fourth quarter of 2006, but that the number of shares to be traded on the stock exchange and the conditions of the IPO still remained undecided.
Rosneft originally planned to launch IPOs on Russian and foreign trading floors in the third quarter of 2006.
Androsov did not say how much the company expected to raise through the IPO, but said that the money would be used to clear $7.5 billion of debts belonging to Rosneftegaz, a state-owned company that holds 100% minus one share in Rosneft. The remaining share belongs to the Federal Agency for the Management of Federal Property, which owns 100% of Rosneftegaz stock.
Rosneftegaz borrowed the money in 2005 to buy a stake in Gazprom under the gas giant's partial share liberalization plan, in order to increase the state's share in the energy giant to a controlling block.
Rosneft has a charter capital of 90.92 million rubles (about $3.3 million), and ordinary shares have a face value of 1 ruble each. Company experts estimate its value at $25 billion.
Under rules set by Russia's financial markets watchdog, no more than 70% of the overall IPO value, or 12% of Rosneft shares, can be floated on foreign markets. Leading foreign companies would therefore only be able to buy minor share blocks in Rosneft, and would not be able to take part in running the oil company, while the state would retain at least 70% of shares.
