Rosneft goes for a $20 billion listing

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By:
Kathryn Wells
Published on:
Russia wrestles with transparency requirements

Sergei Bogdanchikov, RosneftSergei Bogdanchikov
Rosneft’s IPO, planned for the second half of the year, is set to raise as much as $20 billion, making it the country’s largest ever primary listing. The listing will value the oil major at as much as $80 billion.

With Peter O’Brian, previously vice president and co-head of Morgan Stanley’s Moscow office, installed as chief executive officer in early April, IPO plans look to be proceeding smoothly.

Morgan Stanley is one of four banks arranging the IPO – the others are ABN Amro, Dresdner Kleinwort Wasserstein and JPMorgan.

In April the company announced its plans for the consolidation of its main subsidiaries pre-IPO. According to its chief executive, Sergei Bogdanchikov (right), assets of 12 partly owned subsidiary companies will be transferred onto Rosneft’s balance sheet, boosting its capitalization before the listing.

Minority shareholders will be given the option to swap their shares for cash, or for Rosneft stock. Shares in its four main traded subsidiaries plunged on the announcement, which analysts attributed to fears that valuations were below market prices.

According to Valery Nazarov, head of the Federal Property Management Agency, the IPO’s organizers are considering placing the shares in Tokyo as well as in Moscow and London. So far, though, he has ruled out a simultaneous flotation.