gas industry

Yesterday, the president of NGK Itera, Igor Makarov, announced that the company is negotiating with three potential investors about the sale of 25 to 50% of its shares. Earlier, the Financial Times reported that Gazprom was considering the possibility of buying the business of Oil and Gas Company Itera for $500 million, but both companies denied this information yesterday.
Mr. Makarov said in an interview with Interfax yesterday that the company is considering two proposals to purchase a blocking stake and one to purchase 50% of the capital. The president of Itera said that the company is now negotiating all these proposals.
The fact that a blocking stake in Itera Oil and Gas Company could be sold was announced by the company's president Igor Makarov back in the summer of this year, and then he spoke about Gazprom as a possible buyer. Gazprom was then skeptical about such a proposal. Nevertheless, on November 7, the Financial Times (FT), without citing sources, reported that this week the board of directors of Gazprom will discuss the acquisition of the business of the Itera group for $500 million. Mr. Makarov did not name potential buyers in yesterday’s interview. He only clarified that two proposals came from Russian companies, one from a foreign one.
Gazprom denies negotiations with Itera on the purchase of securities. Sergei Kupriyanov, press secretary of Gazprom Chairman of the Board Alexei Miller, said that the board of directors does not expect to meet this week and the purchase of Itera will not be discussed in the near future. “These types of transactions are indeed approved by the board of directors, but they are proposed to the board by the board, which did not discuss the purchase of Itera. The likelihood that such a proposal will be brought to the board by an independent director is zero: there are special procedures at Gazprom for making such investment decisions ", he says.
In turn, the press secretary of the Itera group, Evgeny Ostapov, said that Gazprom is not considered as a potential buyer. “From our point of view, it is not profitable for Gazprom to buy Itera, since in this case it will lose income from the company’s gas transit and cooperation on a number of projects that it will have to conduct independently,” Mr. Ostapov said.
NOVATEK, which could also be considered yesterday as a buyer, said that the merger project is still suspended, the company is Itera's partner in a number of oil and gas production projects, but NOVATEK does not intend to buy Itera shares.
According to unofficial information, Sibneft was previously interested in purchasing Itera's business, but Itera's proposals did not suit it. Steven Dashevsky, an analyst at Aton Investment Company, believes that the buyer of Itera’s business could theoretically be any large oil company that has the political capabilities to protect the business from pressure from Gazprom, “including LUKOIL or Rosneft.” However, he considers Itera's negotiations on the sale of shares of YukosSibneft, TNK-BP and Surgutneftegaz unlikely. None of the major Russian oil companies confirmed negotiations with Itera yesterday.
According to sources close to Itera, the appearance of information about the preparation of a major transaction by Gazprom may be associated with large exchange players on the Gazprom stock market - theoretically, such a major transaction could increase the price of Gazprom shares. However, the author of the FT publication, Andrew Jack, an employee of the newspaper's Moscow office, doubts this. “Information about Gazprom’s intentions was confirmed to me by several serious sources. This can hardly be a stock market game. For example, it is completely unclear to me whether the market will perceive Gazprom’s decision to purchase Itera as positive news or as negative,” he says . However, the FT information did not affect the Gazprom stock market; there were practically no transactions with them, the rate remained at 38.3 rubles.
The statement that Itera is preparing a major transaction, regardless of whether it goes through, plays into the hands of Itera itself. Mr. Makarov himself stipulates that the decision to sell the shares has not yet been made. However, on the eve of the seasonal peak in gas consumption, information about Itera's investment attractiveness and the stability of its business can increase its chances of concluding contracts with consumers, even if it later turns out that the deal did not go through.
DMITRY Kommersant-BUTRIN

Newspaper "Kommersant" No. 205 dated November 11, 2003, p. 13

Authors:

Dmitry Butrin

Itera is preparing for sale