LUKOIL Vice President Leonid Fedun said that the company does not intend to overpay for the privatization of Bashneft. Now Bashneft, taking into account multipliers, is worth more than LUKOIL, Fedun said

Vice President of LUKOIL Leonid Fedun (Photo: RIA Novosti)

“Today Bashneft is already worth more than LUKOIL, taking into account multipliers. She is at the peak of her development. Therefore, LUKOIL does not intend to “kill” for Bashneft,” said LUKOIL Vice President Leonid Fedun during a telephone conference (quoted by Interfax). According to him, there is no point in paying any price for Bashneft, because since the government announced plans to privatize the company, the price of oil has increased by 50%.

As of 17:30, LUKOIL was worth 2.29 trillion rubles on the Moscow exchange, Bashneft - 433 billion rubles. According to Raiffeisenbank analyst Andrey Polishchuk, Fedun most likely compared the company taking into account its debt load: Bashneft’s debt is lower than that of LUKOIL. In addition, the premium to the market for control in Bashneft, without taking into account the state’s ownership of the “golden share,” could range from 15 to 20% of market quotes, Polishchuk notes.

In February of this year, the head of LUKOIL, Vagit Alekperov, noted that his company was interested in a controlling stake in Bashneft. “If we enter, we will enter, of course, as an operator, as a manager of this project, then we are ready to consider this project and take part in the competition for the right to be a shareholder of Bashneft,” he said.

It was previously reported that in 2016 the government is ready to sell its entire stake (50.08%) of shares in Bashneft. The government of Bashkortostan also owns a blocking stake in Bashneft. Subsidiaries of Bashneft have 4.67% of NK shares on their balance sheet, 15.59% are held by other legal entities, including nominal holders. Another 4.66% of the company's shares are owned by individuals.

Fedun also said that LUKOIL is ready to pay the declared dividends even at an oil price of $30 per barrel. However, according to him, on April 26 the company's board of directors will discuss a new dividend policy. “It will be built on new realities and the priorities of dividend payments over all others,” he said, answering a question about dividends.

As a source in LUKOIL clarified to RBC, the dividend policy will include three points: financial sources for paying dividends, the share of net profit and the amount of payments.

The company's current dividend policy, approved in 2003, requires the payment of at least 15% of profits under US GAAP. Today the company reported for the first time under IFRS. Net profit attributable to the company's shareholders according to IFRS for 2015 decreased by 26% to RUB 291 billion. Previously, Fedun promised to increase the company's dividends for 2015 in ruble terms. LUKOIL's interim dividends for January–September 2015 amounted to 65 rubles. per share.

LUKOIL refused to “overpay” for Bashneft