Page 83 - RusRPTNov18

RUB20bn on buying back its preferred shares , Vedomosti d aily reported on October 22 citing company presentation that did not specify the timing of the possible buyback offer. First reports on possible buyback appeared when Transneft announced taking over the Russia's largest port and stevedore group Novorossiysk Commercial Sea Port (NCSP). Similar to other Russian oil majors as Lukoil and Rosneft , Transneft could use the buyback to support its valuation. As analysed by bne IntelliNews, buybacks become a popular option for large Russian corporates as share prices are pressured by sanctions. While 100% of ordinary shares of the company are controlled by the state, 71% of its prefs are jointly controlled by Russian Direct Investment Fund (RDIF), Gazprombank, and Gazfond Pension Savings non-state pension funds with another 28% free-floated. Vedomosti e stimated that RUB20bn would buy about 8% of Transneft's prefs at current prices.
The Russia-China Investment Fund for Regional Development (RCIFRD) and Skolkovo Ventures will establish two new funds with a total capital of $300mn, Kommersant d aily reported citing Skolkovo representatives. "The strategic partnership between [between RCIFRD and Skolkovo] seeks to create new business opportunities for both Russian and Chinese high-tech companies," the funds said in the press release. The first Special Situations fund with $100mn will be established in 2019. The second fund worth $200mn will focus on high tech vertically integrated companies. RCIFRD has atomic energy, infrastructure, logistics, and new technologies as its priority investment fields and operated CNY100bn worth of assets.
The head of Russia's largest oil company Rosneft Igor Sechin has postponed a share buyback until at least the end of this year, Ria Novosti and Tass cited the oil boss saying on October 17. The shares of Rosneft fell by 0.4% following the announcement, while the Moscow Exchange index grew by 1.5% at the same time. Previously in September Sechin already said that he does not see current market conditions as fit to kick off the $2bn share buyback of Rosneft . Uncertainty over the $2bn buyback programme – the company’s first ever -- could undermine Rosneft's investor makeover drive. Previously the company started to deliver on a promise to cut debt, and scale back capex in an effort to improve capitalisation. The positive signals Rosneft has been sending to investors and sanction-induced weakness of Russia's largest bank Sberbank already helped Rosneft to become Russia's most valuable company in terms of capitalisation in August , pushing capitalisation to RUB4.534 trillion ($71bn). Previously Sechin argued that the fair value of the company should be closer to or $130bn . Analysts surveyed by Vedomosti daily on latest Sechin's comments see the decision of holding the buyback back until the share price dives due to some short-term factors as reasonable. Postponing the buyback is not believed to have a lasting negative effect on Rosneft's shares, given the high oil price and growing output on relaxed Opec+ extraction cuts.
MegaFon, a Russian leading telecom operator, may be back on a foreign stock exchange some time in future , Alisher Usmanov, CEO of USM holding (MegaFon’s majority shareholder), said on Sunday. "It is a normal exchange situation: a company buys, then, with time <...> the market volatility can be like this in the West," he said in an interview with the Rossiya-1 television channel, commenting on MegaFon’s delisting from the London Stock Exchange. When asked if the company could be back on a Western exchange, he said "Of course, it is not ruled out". On July 15, MegaFon’s board of directors approves the decision on the delisting from the London Stock Exchange. According to
83 RUSSIA Country Report November 2018 www.intellinews.com