Page 9 - FSUOGM Week 05 2022

FSUOGM INVESTMENT FSUOGM

LetterOne Group to block Wintershall

Dea IPO over Ukraine tensions

GERMANY INVESTMENT conglomerate LetterOne Group with its operations in Russia) could lead to an
has announced its intention to block efforts to undervaluation.
A row over the future bring German oil and gas company Wintershall LetterOne also cited the energy crisis unfold-
of Europe's largest Dea to market, citing market volatility created by ing in Europe, arguing that an IPO would dis-
private energy company escalating tensions on the border with Ukraine. tract attention from Wintershall Dea’s ability to
has escalated, with This represents an escalation in a row with Ger- provide Europe with a reliable gas supply.
Russian billionaire man part-owner BASF over management of the LetterOne Group, which owns a 27% share
Mikhail Fridman's energy company. in Wintershall Dea, has repeatedly argued that
LetterOne conglomerate LetterOne Group was founded by Russian long-term investment in the company and sus-
threatening to block the billionaire Mikhail Fridman, who remains its tained stability in its governance are impera-
majority shareholder's chairman. The group is a minority shareholder of tive to its development. Now, it has told the FT,
efforts to bring the Wintershall Dea, which was created in a merger “short-term stakeholder pressure” on BASF to
manufacturer to between LetterOne’s DEA Deutsche Erdoel and sell off its share will jeopardise the company’s
market. Wintershall, owned by chemicals major BASF. future.
Wintershall Dea is currently Europe’s largest LetterOne Group also stressed its preference
private energy company, and conducts some for M&A and other potential value-added activ-
operations in Russia. ities (which BASF allegedly doesn’t support),
BASF now holds around two-thirds of the suggesting that an IPO could divert focus away
shares in Wintershall Dea, and intends to float from them.
the company on the market in order to sell off LetterOne said that it would support a listing
its stake. In a statement to the Financial Times, of Wintershall Dea “when it makes commercial
BASF re-iterated that the group was “fully com- sense to do so”, and that it would back increased
mitted to divest our share in Wintershall Dea and dividends “when they are in alignment with the
we continue to consider an IPO as the best way to sustainable interests, targets and strategy of the
market our share”. business,” the FT reported.
LetterOne, meanwhile, is resisting an IPO, This is not LetterOne’s first spat over corpo-
allegedly claiming that the market’s uncertainty rate governance. Earlier in January, the group
over the risk of war between Russia and Ukraine reportedly clashed with the Turkey Wealth
(as well as the potential reputational damage Fund (TWF) over the board of underperforming
sustained by Wintershall Dea in connection mobile operator Turkcell. ™

Week 05 02•February•2022 www. NEWSBASE .com P9