Rosneft closes the IPO books


July 13, 2006 by AK

According to Vedomosti and other sources, Rosneft closed the books yesterday recording a total of $18 bn in bids. Let’s look at some of the reported bidders:

Gasprombank: $2.5 bn
Sinopec: $3.0 bn
BP: $2.0 bn
Petronas: $1.0 bn
Vneshtorgbank: up to $0.5 bn
Russian individuals: $0.5 to $1.0 bn

This covers up to $10 bn of the total $18 bn leaving out a huge chunk (I wouldn’t be surprised to see Sberbank on the list). Note that at $7.15 per share (the adjusted minimum price), Rosneft will be sold at a large premium to other Russian oil majors based on price to sales and price to reserves. Why pay this much?

Now Gazprombank is a subsidiary of Gasprom and Vneshtorgbank is virtually 100% state-owned, so this investment might be pure politics. (Gasprombank’s equity is just $1.5 bn — they might be bidding on behalf of Gazprom or some such.) BP is stuck in Russia and couldn’t resist the offer. China and Malaysia, well, that’s a mix of business and politics.

I don’t quite understand Hans-Joerg Rudloff’s part is in this yet (the great investment banker now sits on Rosneft’s board, as a most independent director, naturally), but here’s a delightful bit from The Guardian:

As for allegations about the provenance of Rosneft’s assets? Mr Rudloff is concerned with the future, not the past. And lawsuits challenging Rosneft’s ownership of assets? No different, he reckons, from German companies that have to deal with litigation dating back to the misdeeds of the Third Reich.

No different?

1 comment »

  1. Tim Newman says:

    BP’s decision to invest was undoubtedly influenced by its desire, or even need, to get more reserves on its books.

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