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Rosneft IPO is already oversubscribed: advisor
AFP
LONDON
Petroleumworld.com 07 09 06
The controversial initial public offering of shares in Russia's state-owned oil producer Rosneft has already been oversubscribed, an advisor to the Russian group said on Friday.
"The book is now oversubscribed and is still gaining momentum," said a spokeswoman for one of the banks advising Rosneft.
She asked not to be identified and declined to specify at what price shares were being sold, but news that the offer has been oversubscribed underlined the strong demand for shares in the state-controlled group.
The final price of shares is to be announced on July 14 with trading to begin soon after, but the company has not specified when shares will make their debut on the London and Moscow stock exchanges.
The offer price is between 5.85-7.85 dollars per share, valuing Rosneft at 60-80 billion dollars, the company has announced.
The listing aims to raise at least 8.5 billion dollars (6.6 billion euros) for the company.
In the grey market, where shares are exchanged unofficially before the IPO, Rosneft shares traded at between 6.45 dollars and 6.85 dollars, according to the spread betting group Cantor Index.
Rosneft's listing has attracted controversy because of the company's business background. Its fallen rival Yukos has asked the British markets watchdog to block the IPO because it says Rosneft stole its assets.
Rosneft bought Yukos' main production asset, Yuganskneftegaz, in 2004 at what the market saw as a knockdown price.
The transaction took place against the background of a judicial campaign against Yukos viewed as being masterminded by the Kremlin.
Press reports have claimed that some of the world's biggest energy companies have nonetheless been lining up to subscribe to the offer.
The Financial Times, in an unsourced article, reported on Friday that the IPO had attracted enough demand to cover the minimum target proceeds of 8.5 billion dollars.
China National Petroleum Corp and Malaysia's Petronas are thought to be closest to taking stakes in the IPO, while British group BP is believed to be waiting for other international strategic investors to emerge and further clarity on pricing before making a decision.
Royal Dutch Shell has been offered a stake of up to 2.0 billion dollars, the newspaper said.
BP and Shell have repeatedly refused to comment on whether they will subscribe to the offer.
India's Oil and Natural Gas Corp has confirmed it is considering investing up to 3.0 billion euros in the IPO.
This investment would give the state-run ONGC a 5.0 percent stake in Rosneft, Indian Petroleum Secretary, M.S. Srinivasan, told reporters.
The flotation values Rosneft at 60-80 billion dollars.
AFP 07 1542 GMT 07 06
Copyright ©2006 AFP. All Rights Reserved.
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