Bloomberg News

Rosneft Units' Shares Decline After Valuation Report

November 01, 2005

OAO Rosneft's Stavropolneft unit and its Komsomolsk refinery saw their shares plunge after Vedomosti said that Deloitte & Touche valued some of the companies' units below their market capitalizations, citing unidentified bankers.

Stavropolneft shares slid 23 percent to $420, the biggest decline in over 15 months, giving the company a market capitalization of $152 million, according to Bloomberg data. Deloitte's report said Stavropolneft is worth $58.8 million, Vedomosti reported.

Rosneft, Russia's state-owned oil company, may use the report from Deloitte to help determine how much it should pay to buy out minority shareholders of subsidiaries ahead of an initial public offering, the newspaper said. Russia may complete preparations for Rosneft's initial share sale by the end of the year, Economy Minister German Gref said today in Moscow.

Shares in Rosneft's Komsomolsk oil refinery slid 17 percent to $341, the biggest decrease in over four months. Deloitte valued the plant at $40.1 million, Vedomosti reported.

Russia plans to sell Rosneft shares in an IPO to repay a $7.5 billion loan that Rosneft used to buy 10.7 percent of OAO Gazprom, raising the state's stake in Gazprom to a majority. Gazprom, the state-controlled natural gas company, is the world biggest producer of the fuel.

Shares in Rosneft's Sakhalinmorneftegaz unit rose 10.2 percent to $14, the biggest increase in more than eight months. The valuation from Deloitte said that company is worth $1.26 billion, the newspaper reported. Its market capitalization rose to $1.07 billion today, according to Bloomberg data.

Rosneft may need to pay as much as $9.7 billion, probably in its own shares, to buy out the minority shareholders of all its subsidiaries, Vedomosti said.

No one at Deloitte's Moscow office was available to comment when Bloomberg called after working hours. Rosneft spokesman Vladimir Voyevoda wasn't available.

To contact the reporter on this story: Michael Teagarden in Moscow at

To contact the editor responsible for this story: Tim Coulter at

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