05 August 2016, Moscow — Privately-held Russneft has submitted a bid to buy the Russian government’s stake in oil producer Bashneft (BANE.MM), which is set for privatisation later this year, two sources told Reuters on Thursday.
The stake sale in Bashneft, a mid-sized oil company that has been rapidly growing its output in recent years, is the Russian government’s second major sell-off after it reduced its stake in diamond firm Alrosa (ALRS.MM) last month.
Part of a privatisation drive encompassing the shipping firm Sovcomflot, stakes in the state bank VTB and oil giant Rosneft (ROSN.MM), the aim is to raise funds to stop the budget deficit exceeding a projected 3 percent of the gross domestic product.
One of the sources, a financial market source, said a total of over 10 bids had been submitted for the 50.08 percent Bashneft stake. The same source said the sale was planned for October.
A Russneft official denied the company had submitted a bid for the Bashneft stake. A spokeswoman for the Economy Ministry, which is overseeing the sale, was not immediately available for comment.
Igor Shuvalov, Russia’s first deputy prime minister, was quoted on Wednesday as saying a preliminary evaluation of the state’s Bashneft stake had settled on a figure of around $3 billion.
The Interfax news agency reported on Thursday that the stake had been valued by Ernst & Young at 306 billion rubles ($4.62 billion).
The internal Russian republic of Bashkortostan has a 25 percent stake in the firm, which is not being sold.
Russneft, owned by tycoon Mikhail Gutseriyev, and Bashneft – then owned by oil-to-telecoms conglomerate Sistema (AFKS.MM) – considered a merger in 2010, planning an initial public offering of the united company later. The merger never happened.
Oil giants Rosneft and Lukoil may also consider playing a role in Bashneft’s privatisation, officials have previously said.
The Russian authorities have said that state companies should not take part in the privatization deals and that state banks should not fund such deals.
Separately, two sources told Reuters on Thursday that Russian state banks Sberbank (SBER.MM) and VTB, as well as the country’s largest private lender FC Otkritie, were among those who would arrange the Russneft IPO.
Russneft plans to hold an IPO on the Moscow Exchange in November, aiming to raise $500 million for 10 percent of its shares, a source close to the deal told Reuters earlier.
*Olga Popova, Darya Korsunskaya and Katya Golubkova; Editing by Andrew Osborn – Reuters