Russ Oil-Gas

01-25-2006 Kommersant by Anna Skornyakova - Rosneft is to issue additional stocks for the initial public offering before its subsidiaries are consolidated, Vladimir Nazarov, the head of Russia's federal property agency, said yesterday. State officials apparently decided against the consolidation of Rosneft's assets before the IPO to avoid suits from minor shareholders and unwilling to see YUKOS among shareholders at the presentation for overseas investors. This move may cost Rosneft $2 billion it would not get at the IPO. A decision to convene Rosneft's board of directions to endorse the additional issuing of the company's stocks for the IPO will be made in January, according to Valery Nazarov. "The additional issuing will be held before the consolidation," the official pointed out. Rosneft was set to issue extra 20 percent of stocks after it consolidates and sell its 12.67 stake to clear the $7.6 debt of its subsidiary, Rosneftegaz. 27.5 percent of new stocks of Rosneft, including the sold 12.67 percent, would go on the market, YUKOS' shareholding in the company would drop to 4.3 percent and the share of unpredictable minor shareholders of subsidiaries would fall to 2.1 percent. The placement on the market would let Rosneft cover $12.1 billion debts. Still, the additional issuing before the consolidation of the oil company's subsidiaries makes the later consolidation utterly senseless. The non-consolidated Rosneft is assessed 17 percent cheaper, so the Russian firm is to get $2 billion less from the IPO than it could have.