The British Hedge For Nortgas
// 51 percent of the company stocks went back to Gasprom
On Friday night, Alexander Ananenkov, deputy chairman of Gasprom, and Farkhad Akhmetov, owner of Nortgas, signed an agreement that ended five years of conflict around the company. When this agreement is fulfilled, Gasprom will receive 51 percent of Nortgas stock without paying a penny for that. Also, Nortgas will turn from an open stock corporation into a closed one. However, de-facto Nortgas will keep its independence because Gasprom's power limited by the British law to which Nortgas is the subject. Nortgas will not be an affiliate of the Gasprom but rather one of the independent enterprises included in Gasprom's group.
Lets remind, that on April 15, 2005, the arbitrage court of Moscow ruled to revoke a license from Nortgas allowing the enterprise to produce gas from the Northern Urengoy deposit, which belongs to Gasprom. There were 33 court sessions planed in May after the Gasprom complaints. Later on, the judicial authorities found out that they cannot take away the license from Nortgas because at that very moment the Ministry of Natural Resources issued new license for re-registered open stock corporation Nortgas. In the middle of the April, Gasprom and Akhmedov started new negotiations, which were finished last Friday by the signing of a deed agreement.
Gasprom announced that within two months after the Federal Ant-Monopoly Services(FAS)gives permission, 51 percent of Nortgas stock will be transferred under the ownership of Urengoygasprom. Dmitry Kryuchkov, executive director of Renaissance Capital (financial consultant of Gasprom), told Kommersant that the "new" Nortgas will be registered as a closed stock corporation. Its dividends will be split 49 to 51 between current shareholders of Nortgas and Urengoygasprom.
According to Kommersant information, Gasprom will receive the controlling share of Nortgas assets and rights to buy 100 percent of all gas produced by the company. The purchase price should not exceed the plank established by FAS. Today Nortgas charges 10 percent more for its natural gas despite the fact that it works only at 25 percent of projected capacity. Nortgas had confirmed that the purchase agreement will be sent to Gasprom and signed before the end of the summer. However, Nortgas will not be eaten by Gasprom. Nortgas is the subject of British law and all disputes will be decided in UK arbitrage court. Thus, Akhmedov got additional guaranties that he still will be participating in company's management and profit sharing. For instance, three representatives from Gasprom will join the board of directors together with two of Akhmedov's people. Every management decision should be unanimously approved by all five. According to Kryuchkov, the company will be working not like an affiliate but rather like a joint venture of two equal partners.
Ananenkov, making a comment about signing the deed agreement, said about Gaspom's motivation: "This situation allows Gasprom to reinstall its control over the important gas producing company, which earlier belonged to Gasprom." In his turn, Akhmetov called the conditions of the agreement: "much more profitable than at the moment of the company's creation, and more civilized than a simple return of some assets." According to Akhmedov, Nortgas already this week will start to pump gas at full capacity. There will be 5 billion cubic meters of gas produced per year. Also, the company will gain access to transport and refining infrastructures of Gasprom and will use them for internal discount prices.
The deal is profitable for both sides. The further resistance to Gasprom could ruin the Nortgas business. "The company survived. And in this situation it is better to have 49 percent of healthy assets than 100 percent of problematic ones," said Akhmetov to Kommersant. Let’s note, that Nortgas and its affiliates purchased 49 percent of Itera stock from Achimneftegas (the rest of the shares and drilling license belongs to Urengoygasprom), still did not start to drill the Achim deposits of natural gas. The agreement signed on Friday makes Nortgas to start exploitation of these deposits before end of the year. The company should produce 8 -10 billion cubic meters per year. Nortgas representatives said that all the project documentation is ready, half of the equipment already purchased and "work can start in a year and half."
Natalia Grib, Dmitry Butrin
All the Article in Russian as of June 14, 2005
|
