Page 6 - FSUOGM Week 14 2021

FSUOGM INVESTMENT FSUOGM

Mikhelson sheds 12.5% stake in

Sibur to insurer

RUSSIA RUSSIAN billionaire Leonid Mikhelson, the Other Sibur shareholders include billion-
largest shareholder in Russian petrochemicals aire Gennady Timchenko with 17%, Chinese
The sales come after group Sibur, has sold a 12.5% stake in the com- entities Sinopec and Silk Road Fund with 10%
Sibur jacked up its pany to the country’s top insurance provider each, businessman Kirill Shamalov with 3.9%
dividend payments. SOGAZ. and the petrochemical firm’s current and former
Mikhelson shed an initial 6.25% interest management with 10.6%. Both Timchenko and
in Sibur in late March and has now trans- Shamalov have close ties with Russian President
ferred a further 6.25%, the Moscow-based Vladimir Putin. The latter, understood to be the
RBC newspaper reported on April 3 citing ex-son-in-law of the president, reportedly paid
data from SPARK. The businessman, who is only $100 for a 3.8% interest in Sibur, according
also a major investor and CEO of independ- to a recent investigation.
ent gas supplier Novatek, has retained a 36% Sibur earned a flat net profit of RUB93bn
position in Sibur. ($1.3bn) in 2020, as the impact of the extra sup-
Kommersant estimated in late March that ply from Zapsibneftekhim was offset by weaker
SOGAZ could have paid over $1bn for the ini- prices. EBITDA grew 5.4% to RUB179bn.
tial 6.25% in Sibur. The deals come after Sibur’s The company’s owners have had on-again,
board of directors pledged on March 10 to off-again plans to hold an initial public offering
increase the minimum share of company profits (IPO) for years. Sibur previously said the place-
paid out in dividends from 35 to 50%. The board ment would take place once Zapsibneftekhim
said the move was justified given increased cash had reached full capacity, which occurred in
flow and a drop in Sibur’s debt burden, thanks to December. But it is yet to confirm the plan or
the recent launch of production at the Zapsib- give a timeframe for the IPO.
neftekhim project. “Now is not the worst time” for the offering,
Sibur is set to pay out RUB28.7bn ($380mn) Mikhelson said in late Februatry, according to
in dividends from its profits in 2020. the RIA news agency. ™

Surgutnefregaz shares see spike

RUSSIA THE ordinary shares of Russian oil major Sur- could dismantle its treasury holdings also caused
gutneftegas (SurgutNG) are trading at unusually a temporary rally of its shares.
The surge raises the elevated volumes on no appreciable news flows, Other reasons could be getting better value
question of what BCS Global Markets analysts wrote on April 3, for shareholders out of the company’s $48bn
investors might be noting that this raises the question of what inves- ‘cash pile’ (special dividend, or reallocating net
anticipating. tors might be anticipating. cash position into investments earning), as well
As reported by bne IntelliNews, BCS GM as equalisation of the ordinary dividend with
analysts argued last week that the falling ruble is that of the preferred shares.
supporting the chances that SurgutNG will post "Note that equalisation of the 2020 dividend
a two-year dividend yield of about 30% on its would mean the ord would receive the 17-18%
preferred shares. dividend yield we currently expect to be paid to
While trading in ordinary shares was up, the the pref, far higher than typical 2% yield we are
volume of transactions with preferred shares expecting the ord to earn," BCS GM comments.
was down substantially (60%) from normal as But BCS GM continues to see these scenarios
Europe and the US headed into the long Easter as unlikely and believes that preferred shares of
weekend. SurgutNG still suggest the largest excess return,
This time around too, investors could be while reiterating a Hold rating on ordinary
anticipating a declaration and cancellation of the shares and Buy rating on preferred shares.
company’s ‘phantom’ treasury shares, BCS GM As followed by bne IntelliNews, SurgutNG
analysts suggest. "At one point in history Sur- is the Russian oil sector's "dinosaur" known for
gutNG had some 42% of issued shares sitting in its ultra-conservative financial policies, basing
treasury, but they have since fallen out of report- operations only in rubles, and its $50bn-odd
ing, with no explanation," the analysts remind. cash pile, which is almost as much as Russia’s
To remind, in 2020 rumours that SurgutNG sovereign reserves. ™

P6 www. NEWSBASE .com Week 14 07•April•2021