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Thursday, July 13, 2006

Rosneft Closes Books

07-12-2006 Kommersant - This evening, the state oil firm, Rosneft, will close the IPO books both for individuals and institutional investors, despite the previous intention to accept the bids of the latter till July 13. Those willing to invest in Rosneft are apparently not few in number. The company decided to place 400 million new stocks in addition to the stocks offered by Rosneftegaz. The books' closing is scheduled for this evening, Steven O'Sullivan, who is in charge of the analytical department at Deutsche UFG, said yesterday in time of the telephone conference. The information was confirmed by three sources close to book-runners. For institutional investors, the decision hasn't been made yet, said Rosneft spokesman Nikolay Manvelov. The official plan was to close the individual book on July 10 (but it was put off till today), while the institutional investors had the July 13 deadline. Closing books before the announced deadline doesn't happen often in general and is unique for Russia. The company may shorten the road show if the stocks are popular and it has amassed sufficient number of bids, explained UBS analyst Kakha Kiknavelidze. It is not just over-subscription. It is that exactly the institutional investors, which Rosneft would like to see among holders, have lodged the bids, a source close to book-runners shed light on Rosneft decision. The institutional investors (including CNPC, ONGC, Petronas and BP, perhaps), could have hardly been lured by the petty shares in Rosneft. According to Deutsche UFG, Rosneft will probably become the leader of Russia's oil production, but the dividend will remain moderate for a number of years. More likely than not, investing in Rosneft IPO will pave the way for future foreign holders to the market of Russia. And it appears those willing to have the green light are not few in number. Rosneft decided to place 400 million new stocks in addition to the stocks offered by Rosneftegaz [1.356 billion], Interfax quoted a source close to Rosneft.

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