Extraction for processing

RussNeft will pay off its debts at the expense of Sistema

As AFK Sistema told Vremya Novostey, the company submitted an application to the Federal Antimonopoly Service to acquire a 49% stake in RussNeft. The corporation notes that the decision of the antimonopoly authorities on the legality of such a purchase should be made in the next thirty days, however, neither the amount of the transaction nor the possible timing of its completion have yet been disclosed. Nevertheless, according to experts, obtaining mining assets is very profitable for the head of AFK Vladimir Yevtushenkov, who already controls significant refining capacities of the Bashkir fuel and energy complex.

AFK Sistema showed interest in purchasing a stake in RussNeft back in November last year. However, already in December, Mr. Yevtushenkov stated that the corporation did not intend to establish full control over the RussNeft company, which only at the beginning of this year actually returned to its former owner, Mikhail Gutseriev. “We do not want to acquire either 100% or a controlling stake, we want to acquire only a minority stake - up to 49%,” said Vladimir Yevtushenkov. Let us remind you that, according to some data, about 2% of the company’s shares may go to Sberbank, while the remaining shares will be retained by Mr. Gutseriev. However, some of the experts interviewed by Vremya Novostei did not rule out that even then a fundamental decision on the need for such an acquisition had been made. “Any transactions of this kind must be carried out in silence. Otherwise, there is a high probability that agreements will not be reached at all. And the purchase of 49% of RussNeft by Sistema could be of great importance for both companies,” noted Veles Capital analyst Dmitry Lyutyagin. He explained that the deal, if completed, will achieve a good synergistic effect. Dmitry Alexandrov, head of the investment analysis department of Management Company Univer, agrees with his colleague: “In addition to very convenient logistics, the companies could effectively complement each other: the production assets of RussNeft (21 enterprises produce approximately 17 million tons of oil per year) will be fully operational are provided with processing at the expense of Bashneft (whose own fields are extremely depleted), and the latter, in turn, will receive a stable supply of raw materials.” According to Dmitry Lyutyagin, this would make it possible to create a large vertically integrated company, which could subsequently be sold at a good premium.

At the same time, there are a number of obstacles on the way to completing a transaction that is beneficial for both counterparties. First of all, this concerns the significant debts of RussNeft (about 193 billion rubles). Mr. Yevtushenkov openly stated this at the end of December: “This means that we are not going to consolidate this debt for ourselves, but we are going to work with our partner so effectively that we can reduce this debt.” “Sistema’s decision to purchase only 49%, and not a controlling stake, may also be due to the fact that, despite all the attractiveness of the emerging scheme, from an operational point of view, the problem of the debt load and its financing remains,” noted Dmitry Alexandrov. However, according to him, if a unified structure is nevertheless created, then due to the high efficiency of both elements included in it, the main part of the debt can be reduced in the next four years.

However, the deal must still be approved at the government level. The fact is that among other assets of Russneft, the list of its reserves also includes the strategic Varyegonskoye field. Let us recall that it was precisely this that became an obstacle to the purchase of RussNeft by Oleg Deripaska’s structures. The foreign company En+ acted as the buyer on the businessman’s side. As a result, after two years of considering Basel’s application, the government commission for control over foreign investment did not give consent to the deal. “In the current situation, control remains in the hands of Russian businessmen, so no questions should arise,” concluded Dmitry Lyutyagin.

Petr GELTISHCHEV