Sechin’s Rosneftegaz to Acquire 5% of RusHydro for $1.3 Billion

OAO Rosneftegaz, the energy holding run by President Vladimir Putin’s ally Igor Sechin, plans to acquire about 5 percent of hydropower producer OAO RusHydro for cash and stock, Energy Minister Alexander Novak said.

Rosneftegaz plans to buy about 40 percent of regional utility OAO Irkutskenergo from state-run power exporter OAO Inter RAO UES and then transfer that stake plus cash to RusHydro in exchange for about 5 percent of RusHydro’s shares, Novak told reporters in Yalta, Ukraine, late yesterday. It will also pay about 16 billion rubles in cash, he said.

“The total sum of funds that will be transferred is estimated at 41 billion rubles” ($1.3 billion), Novak said. “Forty-one billion rubles is about 5 percent.”

Sechin was deputy prime minister until May, when Putin put him in charge of Rosneftegaz, which was created to hold the state’s 75.2 percent stake in oil producer OAO Rosneft and 10.7 percent of natural-gas exporter OAO Gazprom. He is also Rosneft’s chief executive officer.

To contact the reporter on this story: Anna Shiryaevskaya in Yalta at ashiryaevska@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net