privatization

On Friday, the Belarusian government announced that it would sell its shares (10.83%) to Slavneft on November 22, a few days before the company's shares owned by the Russian Federal Property Fund are to be auctioned. The exact date of the Russian Slavneft auction will be announced today unless the government decides to require non-standard collateral from bidders.
The Belarusian stake will be sold on November 22 at the Belarusian Currency and Stock Exchange. The initial price of the package is set at $200 million. The Belarusian Ministry of Economy says that the desire to sell the securities before the Russian auction is due to the fact that after it the value of Slavneft shares owned by Belarus will decrease.
Actually, these papers are not of particular interest even now. Buying up shares of enterprises that are formally part of the Slavneft holding is much more promising. To control the parent company, you need to buy 74.95% of the securities that the RFBR sells.
The Russian auction for Slavneft will take place, as Kommersant learned from sources in government structures, before December 25. The exact date is expected to be announced today. Slavneft on Friday already appointed the person responsible for privatization - a member of the company's board of directors, head of the federal property department of the Russian Federal Property Fund Valery Nakonechny.
On Friday, the head of the Ministry of Antimonopoly Policy and Entrepreneurship Support, Ilya Yuzhanov, said that MAP will grant permission to all applicants to purchase the state stake in Slavneft. MAP received ten applications to purchase the oil company's securities. According to confidential information from government sources, at least one foreign company, British Petroleum, is among the bidders for the auction. According to Mr. Yuzhanov, the ministry “analyzed the situation” and came to the conclusion that “in no case, no matter who the buyer of this package is, will there be such changes in any commodity market in Russia that would make it possible to prohibit someone from participating in this auction."
The number of applications submitted to MAP does not mean that there will also be ten participants in the auction. Some applicants may “fall away” after the Russian Federal Property Fund announces the amount of the deposit and the conditions for its return. According to the law "On the privatization of state and municipal property", the amount of the deposit made by applicants for the purchase of state property is set at 20% of its initial cost, but not more than 4.5 million minimum wages (minimum wage). At the moment it is about $15 million. But the sale of Slavneft is a very large deal, and, according to unofficial information, the possibility of increasing the pledge to $500 million is now being considered. The corresponding bill will be proposed to be considered by State Duma deputies this week. This deposit will be returned to losing companies after the full amount is transferred by the winning bidder (deadline: February 15). Companies that are not confident of their victory are unlikely to want to freeze such a large deposit for several months.
Meanwhile, bidders for Slavneft's securities began their game to reduce the company's value. On November 4, the Moscow Arbitration Court decided to terminate the deal on Slavneft’s acquisition of 92% of the shares of Varyeganneft (this company provides 9.5% of Slavneft’s oil production). The shares of Varyeganneft will return to the ownership of five offshore companies controlled by the former president of Slavneft, Mikhail Gutseriev, after he returns the $290 million received for the shares. However, Slavneft says that the termination of this deal is beneficial to the state and the auction winners: the company gets rid of the problem asset, receiving money in return. The “problematic nature” of the asset is explained by the fact that 17% of the returned block of shares is claimed by Bills Trade LLC, owned by Alliance Capital Investment Company.
DENIS Kommersant-SKOROBOGATKO

Newspaper "Kommersant" No. 208/P dated November 18, 2002, p. 16

Belarus is in a hurry to part with Slavneft