Rosneft set to unveil float price

Issues

Its share price is widely expected to be set at $7.45-$7.55, valuing the firm at between $76bn and $77bn. But its market debut, set for next week, may be delayed as rival Yukos has begun legal action to halt the sale. The row concerns Rosneft's Yugansk oil unit which was seized to settle a tax bill, a move Yukos says was illegal. Yukos spokeswoman Claire Davidson said the firm had asked the UK courts to impose a temporary injunction on the share sale, adding that a decision may be reached on Friday. She said that the company was seeking a judicial review of the sale, and hoped that legal authorities would hold a hearing and deliver a judgement before 19 July, when trading in Rosneft shares is scheduled to start. Yukos has already failed to convince the UK's Financial Services Authority (FSA) to stop the float - which will be Russia's biggest ever. If Rosneft's shares are priced at the top end of its range it would be the fourth biggest initial price offering in the world after NTT, Enel and Deutsche Telecom. Rosneft has insisted that the latest legal manoeuvres will not affect its flotation. "Our lawyers consider that suits and court cases like that have no effect whatsoever on the (flotation)," said spokesman Nikolai Manvelov. The initial public offering is expected to raise almost $10bn, most of which will go towards paying loans taken out to buy Russian natural gas monopoly Gazprom last year. Among those buying shares in the company may be BP and other major oil companies, who want a stake in Russia's expanding oil sector. The prospective listing has attracted added attention as the price of oil has surged to record highs in recent months. Rosneft bought Yugansk in 2004 after it was seized from Yukos and auctioned off to settle a disputed unpaid tax bill. Yukos has been gradually dismantled over the past two years and is in the middle of bankruptcy proceedings in Russia. It says it has been the victim of a politically motivated campaign which has seen key executives either jailed or forced out of Russia. There have been allegations that the political ambitions of its jailed founder, Mikhail Khodorkovsky led to the dismantling of the firm, which was once Russia's biggest crude oil producer. But Russian authorities argue that Yukos was guilty of huge fraud and tax evasion and that they rightfully pursued it for money owed to the state. (BBC)

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