Friday, July 21, 2006

Rosneft-style IPO coming soon

The Russian government is satisfied with the way the IPO of Rosneft has been completed. Another Initial Public Offering is in the works, and it might come sooner rather than later.

The company in question is OGK-5, part of the RAO UES of Russia energy giant. The proposed date for the IPO has been moved from November 2007 to November 2006.

OGK-5 was separated from RAO UES as a result of a reform carried out in 2005. More components of RAO UES will come onto the market in this pilot scheme is a success.

The company is expected to raise around USD500 million.

The reasons for bringing the IPO date forward is that the current market conditions are conducive to an event of such magnitude, with investors showing appetite for owning securities of Russian energy companies.

The main person behind the IPO scheme is the head of the president’s administration Sergei Sobyanin. According to some analysts, he is trying to strengthen his position with regards to Kremlin’s internal politics.

The oil and gas sector is very competitive, with many of Kremlin’s top officials having links to it. The electricity sector could be considered as being up for grabs.

Gazeta, RusEcon

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