Bashneft May Pick Morgan Stanley, Barclays, Sberbank for Offer
OAO Bashneft, an oil producer controlled by Russian billionaire Vladimir Evtushenkov’s AFK Sistema, will seek shareholder approval for Morgan Stanley (MS), Barclays Plc (BARC) and OAO Sberbank to underwrite a share offering.
The board agreed to increase capital by 37 million ordinary shares and seek to list stock on Moscow Exchange’s first tier before the possible offering, Bashneft said in a statement today. It plans to raise at least $1 billion in the share sale, Chief Executive Alexander Korsik said last month in London. Shareholders will meet Aug. 14 to vote on the underwriters.
“A final decision on the offering is subject to a number of factors, including market conditions, and has not yet been taken,” Board Chairman Felix Evtushenkov said in the statement. Sizes of respective stakes offered by Sistema and Bashneft are being discussed, said Evtushenkov, who’s the son of Vladimir.
Russian markets have been rocked by the country’s dispute with the U.S. and European Union following its annexation of Crimea in Ukraine. Bashneft slumped as much as 17 percent after Russia’s parliament approved use of military force in Ukraine at the end of February. The company’s share price has since recovered, bringing gains this year to 26 percent.
The offering “would not only improve liquidity but also instill confidence in the sustainability of robust shareholder returns,” said Timur Salikhov, a BCS Financial Group oil and gas analyst whose research calls Bashneft his “best idea.”
Terms for the offer may allow current holders privileged rights to acquire shares in proportion to their holdings of common stock, according to a regulatory filing. A reference in the filing to offering the holders a discount of as much as a 10 percent is simply standard regulatory language, Alexander Shadrin, a Bashneft spokesman, said today by phone from Moscow.
“The price of the offering, including for privileged rights, will be determined by the board of directors after the end of the period for privileged rights but not later than the start of the offering of securities,” Shadrin said.
Registration for the offering closes on July 14.
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