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Banks divided on Rosneft value, attractiveness of IPO - paper

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MOSCOW, June 15 (RIA Novosti) - Banks organizing Rosneft's eagerly anticipated initial public offering, expected in mid-July, put the value of Russia's No. 3 oil company at somewhere between $63-120 billion, a respected business daily said Thursday.

Vedomosti also said analysts were divided as to the attractiveness of the IPO, which experts say could bring in $8-$20 billion, and suggested other assets in Russia's gigantic hydrocarbons sector could be more tempting.

Rosneft has said it will float its shares on Russian and London stock exchanges, and sell them to individual investors, although it has not identified the size of the IPO. The state-owned oil company officially announced Monday that its shares would be up for sale at Russian banks from June 26 through July 10. Vedomosti said a roadshow for the IPO would start June 26.

The paper said the expert valuations, which put Rosneft second after another government-controlled asset - energy giant Gazprom - varied substantially. Morgan Stanley and Troika Dialog brokerage said the company was worth $63-64 billion, while Uralsib, Deutsche UFG and Morgan Stanley again put the figure as high as $117-120 billion.

In comparison, Vedomosti said privately held LUKoil, which has larger oil reserves and higher output and is Russia's second largest oil company by assets, was worth about $54 billion Wednesday.

Valuations of Rosneft, which produced 1.466 million bbl/d last year, exceeded all expectations, the paper said. It cited company president Sergei Bogdanchikov who said in September the oil producer would be worth only $70-80 billion in five years' time.

However, experts differed on the investment prospects, Vedomosti said. Troika Dialog said Rosneft's shares were the securities of the future, and even called a report on the company "Cream of the Upstream." It said Rosneft would raise production 6.9% annually to reach 2.33 million bbl/d by 2012.

Other investment banks were more bearish. Ivan Mazalov of Prosperity Capital Management told the paper he was doubtful about the attractiveness of the IPO.

"For this much money, it is far more interesting to buy LUKoil," he said.

His sentiments were echoed by Mark Mobius, managing director of Franklin Templeton Asset Management, who told Vedomosti that Rosneft was unlikely to attract the money it expected to attract only a week ago as developing markets took a nosedive.

Experts expect the IPO to be complete by July 15, when the Group of Eight industrialized nations, which Russia currently chairs, starts its annual summit in St. Petersburg.

Rosneft said it would use part of the funds it expected to raise to pay off a $7.5-billion loan granted last year by a consortium of banks that Rosneftegaz, a state-owned company that owns 100% in Rosneft, had taken to buy 10.74% in Gazprom.

Russian Economic Development Minister German Gref said Wednesday the government would still control over 70% of the company after the IPO.

Rosneft has charter capital of 90.92 million rubles (about $3.3 million), and its ordinary shares have a face value of 1 ruble each.

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