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Nurly Zhol and structural reforms set to boost Kazakh growth to 2.5% – IMF

Nurly ZholA combination of targeted fiscal support, exchange rate adjustment, strengthened domestic liquidity management and structural reforms have helped Kazakhstan counter the effects of lower oil prices and slower growth in Russia, China and Europe, the IMF pronounced this week; and, while GDP growth slowed to 1% in 2016, it is expected to bounce back to 2.5% in the current year.
Significantly, (more…)

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Air Astana, Kazatomprom and KazMunayGaz to kick off Kazakh privatisation programme

airastanaKazakh privatisation programme: A significant proportion of the Kazakh government’s stakes in KazMunayGas, Air Astana and Kazakhtelecom operator are to be sold off over the next 18 months after a government commission gave its approval to plans drawn up last year by the Samruk Kazyna Sovereign Wealth Fund to privatise a total of 153 companies through a series initial public offerings (IPOs), the fund’s CEO Umirzak Shukeyev announced earlier this week. (more…)

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Putin celebrates as Qatar wealth fund and Glencore buy $11bn Rosneft stake

PutinRussian President Vladimir Putin took to the TV airways yesterday to celebrate the news that the commodity trader Glencore and Qatar’s QIA sovereign wealth fund – Glencore’s largest shareholders – had agreed to buy Moscow’s 19.5% stake in the state-run Rosneft oil giant for a figure Putin put at $11bn, boosted by what he described as “the rising trend in oil prices.”
The transaction was so big that Putin specifically asked Sechin to work with the Finance Ministry and central bank to ensure that it did not destabilize the currency market when the proceeds were converted into roubles. The rouble gained against the dollar in late trading after the deal was announced. and shares in Rosneft jumped by 6.4% on the news.
Glencore Chief Executive Officer Ivan GlasenbergPutin haled the surprise deal as the “largest acquisitions in the oil and gas sector in the world in 2016.” It is certainly the biggest foreign investment in Russia since the crisis in Ukraine and comes little more than a year after Glencore Chief Executive Officer Ivan Glasenberg had to go cap in hand to his shareholders for a cash injection. Qatar’s involvement also marks a rare venture of an OPEC member into the Russian energy sector.
Putin was joined on air by his long-term ally and Rosneft CEO Igor Sechin who thanked the President for his part in brokering the deal which, he said, only “became possible thanks to your personal contribution,…..the negotiated price is in our view the maximum possible with the minimum discount of 5% to market prices.” Financing will be provided by “one of the largest European banks,” he added, without specifying which one.
Putin and UlyukaevThe deal comes at the end of an eventful few weeks for Russia’s privatisation programme which has seen Economy Minister Alexey Ulyukaev dismissed and put under house arrest, accused of taking a bribe to end his objections to Rosneft taking part in the privatisation of Bashneft; and Deputy Finance Minister Alexei Moiseev announcing that hundreds of SMEs were likely to put up for sale next year as Moscow scrambles to raise cash to fill its $21bn budget deficit.
The new deal will go a long way to reducing that debt, but with Rosneft and Sechin himself subject to the sanctions imposed by the West after the annexation of Ukraine, Glencore announced that it would be “fully ring-fenced” from exposure to the Russian state company, apart from a 0.54% “indirect equity interest.”
Russia will retain a controlling stake in Rosneft after the deal, while BP owns a further 19.75% stake in the company.

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Hundreds of SMEs to be included in Russian privatisation programme

Russian Textile CompanyRussian privatisation: Hundreds of Russian SMEs could be put up for sale alongside some of the country’s larger blue-chip companies next year, Deputy Finance Minister Alexei Moiseev said yesterday, as he flagged Moscow’s intention to make a “significant push” to speed up its privatisation programme. (more…)

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Russian Economy Minister Ulyukaev arrested over Bashneft ‘bribe’

Putin and UlyukaevRussia’s Economy Minister Alexei Ulyukaev is under arrest after being accused of accepting a $2m bribe in exchange for signing off on Rosneft’s purchase of a stake in mid-sized oil producer Bashneft. “The minister is detained,” the Investigation Committee said in a statement released overnight. “In the near future (more…)

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Russian privatisation plans expanded to include VTB bank, Alrosa and Russian Railways

VTB Office towerRussian privatisation: The government in Moscow has drawn up plans to sell stakes in the VTB bank (35%), the Alrosa diamond mining concern (8%) and Russian Railways (25%) over the course of the next three years, (more…)

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Rosneft privatisation next after Sechin wins $5bn battle for Bashneft

Bashneft Oil field BashkortostanRussian Prime Minister Dmitry Medvedev yesterday gave into pressure from his boss President Putin and signed off on Rosneft’s $5.3bn bid for a controlling stake in the smaller state-owned oil enterprise Bashneft oil – and then (more…)

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Rosneft favourites to buy Bashneft as Moscow bows to financial pressures

BashneftRussia’s state-run Rosneft is in pole position to gain control of the Bashneft oil enterprise, it emerged this week, as Moscow bows to pressure to plug a budget deficit that is forecast to hit $48bn this year. Having firstly revoked its decision to postpone the privatisation of Bashneft until (more…)

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Moscow looking to sell off Aeroflot’s Rossiya Airline subsidiary

Rossiya AirlinesJust days after shelving plans to privatise Aeroflot, Moscow is considering selling off the national carrier’s loss-making subsidiary, St Petersburg’s Rossiya Airlines. (more…)

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Aeroflot privatisation put off until 2020 – but Bashneft sale still on the cards

Aeroflot adAeroflot privatization: Russia’s flagship national airline will not be privatized before 2020 at the earliest, the Economic Development Ministry’s director of Corporate Governance Oksana Tarasenko said yesterday, but (more…)

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Shares in Bashneft jump as Sechin offers Putin $5bn for Kremlin stake

Sechin TASS:Mikhal MetzelShares in Bashneft jumped yesterday after Rosneft Chairman Igor Sechin, undeterred by Prime Minister Dmitry Medvedev’s reluctance to allow Russia’s largest oil enterprise to take part in plans to privatise its smaller competitor, went directly to his long-term ally President Putin and asked for permission to buy a controlling stake for a premium $5bn. If Putin overrules Medvedev (more…)

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Bashneft privatisation postponed as Rosneft sale moves up agenda

Bashneft refineryBashneft privatisation: The Russian government is considering putting its 19.5% stake in the Rosneft oil giant up for sale, it emerged yesterday, after Prime Minister Dmitry Medvedev announced that the Kremlin was indefinitely postponing the privatisation of Bashneft, its smaller competitor.
The sale of Bashneft had been planned for this autumn and had been meant to help plug gaps in Russia’s budget caused by an oil price slump and Western sanctions imposed over the country’s actions in Ukraine; but the privatisation has become mired with controversy after Rosneft defied the authorities by asking to be included in the bidding process, despite a ruling from the government that, as a state-run enterprise, it was ineligible to take part.
Rosneft’s management has been claiming that a legal loophole gave it the right to participate and two sources familiar with the situation are quoted in the Financial Times as suggesting that there was now “too much noise” around the deal, prompting Medvedev’s spokeswoman Natalia Timakov to announce that the sale – which was expected to raise well over $4bn – was to be postponed for an unspecified period of time. Medvedev may also have been disappointed by the likely return on the sale. “The stake valuation was too high at current oil prices,” said Andrey Polischuk, an analyst at Raiffeisen Bank in Moscow. “Perhaps only Rosneft was ready to pay that much, but it doesn’t suit everyone as a bidder and probably this issue has yet to be discussed by the government.”
Head of Republic of Bashkortostan Rustem KhamitovThe sale had also been opposed by Rustim Khamitov, Head of the Republic of Bashkortostan, where many of Bashneft’s oil fields are located. 
While it is unclear if Moscow’s decision to look at selling Rosneft instead has been prompted by its disagreement with the company’s defiance over the Bashneft privatisation process, it has not come out of the blue; earlier this year, Russian Finance Minister Anton Siluanov told CNBC that it was hoping to divest its 19.5% stake in the second half of the year and would be expecting to raise just under $10bn.

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Rosneft and VTB defy Medvedev over Bashneft privatisation

Bashneft logoBashneft privatisation: Rosneft and VTB Bank appeared to have set themselves on a collision course with the Kremlin last week after the oil giant accepted the bank’s invitation to participate in the privatisation of regional oil producer Bashneft. The development comes (more…)

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Moscow issues guidelines for Rosneft privatisation and hopes for $11bn

rosneft logo 2Rosneft privatisation: The Russian government has published the criteria that anybody wanting to participate in the forthcoming sale of its 19.5% stake in the Rosneft oil company will have to meet as it looks to raise $11bn to shore up its struggling economy. (more…)

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Moscow rules out VTB sale in 2015

VTB Office towerVTB sale: Russia’s state-owned VTB will not be privatised this year, Deputy Prime Minister Igor Shuvalov announced today. “We consulted and decided that this is not the best time. We will not offer VTB shares this year,” he told Interfax. With (more…)

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Bashneft and Sovcomflot added to Russian privatisation programme as Alrosa sale nets Kremlin $816m

SovcomflotRussian privatisation programme: The state-run Bashneft (oil) and Sovcomflot (shipping) companies could be put up for sale by the end of the year, Russia’s First Deputy Prime Minister Igor Shuvalov said yesterday.
The announcement (more…)

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Moscow puts Alrosa stake into play

Alrosa diamond mine 2The Russian government yesterday officially went ahead with its plans to sell a 10.9% stake in the Alrosa diamond mining company in attempts to help to shore up an economy reeling from the effects of weak oil prices. The world’s largest producer of rough diamonds when measured by carats, (more…)

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Moscow hoping to raise $889m from Alrosa privatisation – date set soon

Alrosa diamond displayAlrosa privatisation: The Russian government is hoping to raise $889m through the sale of a 10.9% stake in the Alrosa diamond mining company, with OppenheimerFunds, Lazard and the AMG’s Genesis Asset Management reported to be ready to spend about $450m to buy 3.09%, 0.99% and 0.8% respectively, sources close to the company said over the weekend. A decision (more…)

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Rosneft worth $130bn, claims CEO as Putin considers sale to China or India

Putin and SechinThe Russian energy giant  Rosneft could be worth as much as $130bn, its CEO Igor Sechin said this week, amid reports that President Putin was considering selling a 19.5% stake to interested parties in either China or India. (more…)

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Ulyukayev invites Germany to take part in Russian privatisation programme

Russian Minister of Economic Development Alexey UlyukaevThere is no reason that German companies should not participate in the Russian privatisation programme, Economic Development Minister Alexey Ulyukayev told journalists in Stuttgart yesterday. “German companies can participate in privatization in Russia through IPOs (more…)

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