Gazprom Set to Buy Assets from Eni, Enel - (The Moscow Times)
In the coming days, Gazprom may announce the purchase of 20 percent of Gazprom Neft and former Yukos gas assets from Eni and Enel for more than $5.5 billion, and Sberbank, Gazprombank and Rosselkhozbank have offered to help finance the deal.
The purchases are expected to be announced April 6 or 7, when Italian Prime Minister Silvio Berlusconi will be in Moscow, a source close to Eni, a Gazprom Group official and a source close to Gazprom's board told Vedomosti. One of the sources said both deals were already approved in an absentee vote by the Gazprom board.
Gazprom Neft shares rose as much as 30 percent when the MICEX opened Wednesday before shedding some of the gains.
Initially, the option with Eni to buy the Gazprom Neft stake was paying for Gazprom, which included a profit in its 2007 results to intercontinental financial reporting standards after a revaluation of the option, without which it would have had its first fall in profit a number of years.
At its peak in June, 20 percent of Gazprom Neft was worth $7.7 billion, and Gazprom's losses from revaluing the option on Oct. 1, 2008, were 42 billion rubles ($1.25 billion). The oil producer is Russia's fifth largest by output, with a capitalization of $10.9 billion. Gazprom owns 75.7 percent.
A delegation of Italian business representatives will accompany Berlusconi to Moscow, including officials from Eni, said Marco Ventura, a spokesman for the Italian administration. Enel executives will also make the trip, a company spokesman said. Both Ventura and the Enel spokesman declined further comment.
The former Yukos assets will cost Gazprom more than $5.5 billion. For 20 percent of Gazprom Neft, it will have to pay Eni slightly more than $4 billion, while 51 percent of Severenergia — which owns Yukos gas assets ArcticGaz and Urengoil with reserves of nearly 1 trillion cubic meters — will earn Eni and Enel nearly $1.5 billion, the source close to Gazprom said.
The Italian energy companies acquired the assets two years ago during the sell-off of Yukos' holdings. Gazprom did not take part in the auctions, fearing legal risks, and fundamentally the lot with Gazprom Neft, ArcticGaz and Urengoil went to Eni and Enel.
Eni spent $3.7 billion for the stake in Gazprom Neft, and they jointly spent $2.1 billion for the gas assets. Gazprom reached an agreement at the time that it would be able to purchase some of the assets within two years.
Gazprom's control initially promised to exercise the option, but since the crisis hit they had begun to doubt whether the deal made sense. In individual, the capitalization of Gazprom Neft has steadily fallen, and the 20 percent stake was worth $2.2 billion Tuesday. The gas export monopoly did not even include the purchases in its budget for this year.
A Gazprom source earlier told Vedomosti that the company would have been able to negotiate a prolongation of the option with Eni, or not exercise it in all. The source close to Eni confirmed that, saying that even without the stake, Gazprom was the unchallenged majority in Gazprom Neft.
The Italian company has never intervened in the company's operations, and its representatives have never even participated in a planned Gazprom Neft board meeting, a situation on which the Eni source declined to comment.
Gazprom is currently looking to reach an agreement on an extension of the payments, the Gazprom source said. He would not say what size the first tranche would be, saying only that talks with banks on a loan for the deal were already under way.
Three have already indicated that they would help, offering a combined 3.2 billion euros ($4.3 billion). Sberbank is prepared to lend nearly 2 billion euros, with Gazprombank and Rosselkhozbank each ready to offer 600 million euros, a source close to one of the state banks said. The source close to Gazprom confirmed the list of banks, as well as the 2 billion euro offer from Sberbank.
Spokespeople for the banks, Gazprom, Eni and Enel declined to comment.
It is not yet clear why Gazprom in the final decided to exercise the option. The source close to one of the state banks in the list of potential lenders said the deal had been recommended by Prime Minister Vladimir Putin. The Russian and Italian prime ministers discussed a possible deal about a month ago, the source close to Eni said, although no one else was able to confirm the conversation.
Dmitry Peskov, Putin's press secretary, said he was not aware of the matter.
(Vedomosti, MT)
The purchases are expected to be announced April 6 or 7, when Italian Prime Minister Silvio Berlusconi will be in Moscow, a source close to Eni, a Gazprom Group official and a source close to Gazprom's board told Vedomosti. One of the sources said both deals were already approved in an absentee vote by the Gazprom board.
Gazprom Neft shares rose as much as 30 percent when the MICEX opened Wednesday before shedding some of the gains.
Initially, the option with Eni to buy the Gazprom Neft stake was paying for Gazprom, which included a profit in its 2007 results to intercontinental financial reporting standards after a revaluation of the option, without which it would have had its first fall in profit a number of years.
At its peak in June, 20 percent of Gazprom Neft was worth $7.7 billion, and Gazprom's losses from revaluing the option on Oct. 1, 2008, were 42 billion rubles ($1.25 billion). The oil producer is Russia's fifth largest by output, with a capitalization of $10.9 billion. Gazprom owns 75.7 percent.
A delegation of Italian business representatives will accompany Berlusconi to Moscow, including officials from Eni, said Marco Ventura, a spokesman for the Italian administration. Enel executives will also make the trip, a company spokesman said. Both Ventura and the Enel spokesman declined further comment.
The former Yukos assets will cost Gazprom more than $5.5 billion. For 20 percent of Gazprom Neft, it will have to pay Eni slightly more than $4 billion, while 51 percent of Severenergia — which owns Yukos gas assets ArcticGaz and Urengoil with reserves of nearly 1 trillion cubic meters — will earn Eni and Enel nearly $1.5 billion, the source close to Gazprom said.
The Italian energy companies acquired the assets two years ago during the sell-off of Yukos' holdings. Gazprom did not take part in the auctions, fearing legal risks, and fundamentally the lot with Gazprom Neft, ArcticGaz and Urengoil went to Eni and Enel.
Eni spent $3.7 billion for the stake in Gazprom Neft, and they jointly spent $2.1 billion for the gas assets. Gazprom reached an agreement at the time that it would be able to purchase some of the assets within two years.
Gazprom's control initially promised to exercise the option, but since the crisis hit they had begun to doubt whether the deal made sense. In individual, the capitalization of Gazprom Neft has steadily fallen, and the 20 percent stake was worth $2.2 billion Tuesday. The gas export monopoly did not even include the purchases in its budget for this year.
A Gazprom source earlier told Vedomosti that the company would have been able to negotiate a prolongation of the option with Eni, or not exercise it in all. The source close to Eni confirmed that, saying that even without the stake, Gazprom was the unchallenged majority in Gazprom Neft.
The Italian company has never intervened in the company's operations, and its representatives have never even participated in a planned Gazprom Neft board meeting, a situation on which the Eni source declined to comment.
Gazprom is currently looking to reach an agreement on an extension of the payments, the Gazprom source said. He would not say what size the first tranche would be, saying only that talks with banks on a loan for the deal were already under way.
Three have already indicated that they would help, offering a combined 3.2 billion euros ($4.3 billion). Sberbank is prepared to lend nearly 2 billion euros, with Gazprombank and Rosselkhozbank each ready to offer 600 million euros, a source close to one of the state banks said. The source close to Gazprom confirmed the list of banks, as well as the 2 billion euro offer from Sberbank.
Spokespeople for the banks, Gazprom, Eni and Enel declined to comment.
It is not yet clear why Gazprom in the final decided to exercise the option. The source close to one of the state banks in the list of potential lenders said the deal had been recommended by Prime Minister Vladimir Putin. The Russian and Italian prime ministers discussed a possible deal about a month ago, the source close to Eni said, although no one else was able to confirm the conversation.
Dmitry Peskov, Putin's press secretary, said he was not aware of the matter.
(Vedomosti, MT)
