Rosneft to float on Moscow and London exchanges

24-08-2006

Rosneft plans to float shares on both the Moscow and London stock markets, the Russian oil giant confirmed yesterday.

The state-run firm will sell stock from June 29th during the initial public offering (IPO), according to the state-run RIA news agency.

Upwards of $10 billion (£5.4 billion) could be raised from the floatation.

Rosneft's main shareholder is state-owned parent firm Rosneftegaz, which borrowed $7.5 billion last year to buy additional shares in Russian gas monopoly Gazprom.

Analysts said the funds will be used to pay back some of the Kremlin's debt mountain borrowed from four banks to acquire the controlling stake in Gazprom.

Rosneft, one of the world's largest oil firms, which made a net profit of $802 million in the first quarter of 2006, will list on both Russia's Micex stock exchange and the London Stock Exchange, according to RIA.

But the flotation has some critics who are less than convinced with Russia's corporate practices.

Financier George Soros is one of them. He told the Financial Times last month that if the IPO went ahead, it would be detrimental to Europe's energy security.

The subscription period for domestic and international investors will be between June 26th and July 10th.


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