Russ Oil-Gas

06-30-2006 Kommersant by Alexandra Simonenko, Alexey Lampsi, Natalia Grib - A third of Gazprombank goes to Gazfond instead of to Dresdner Bank The largest deal involving a foreign investor ever to take place in the Russian banking sector has fallen through. Dresdner Bank has not acquired 33.3 percent of Gazprombank. The results from the June 20 annual shareholders meeting of Gazprombank, which were published yesterday, held a big surprise. At that meeting, it was decided not to place a supplemental emission of the bank with Dresdner Bank but with Gazfond pension fund, a Gazprom affiliate, which will pay 50 percent more than Dresdner was to. Gazprombank will sell 6.67 million shares to Gazfond for 5184 rubles each, for a total of 34.6 billion rubles. In December 2005, that stock package was assessed 23.2 billion rubles. As of April 1 of this year, Gazprombank was ranked third in Russia by its own capital (45.35 billion rubles) and the sum of its net assets (489.31 billion rubles). The main shareholders in the bank are Gazprom (87.49%) and New Financial Technologies (12.51%). New Financial Technologies is 99.99-percent owned by Gazprombank. A Gazprombank official spokesman explained that change of plans as due to the fact that Gazfond "made a more interesting offer." He emphasized that Dresdner Bank remains a strategic partner of Gazprombank and may in the future become a bank shareholder. The bank plans its IPO for next year. Dresdner Bank declined to comment on the financial aspects of the deal. A spokesman for the Dresdner investment division told Kommersant that "our relations with the Russian bank remain very good, we are working on a mass of other projects." Analysts say that the deal may indicate that Gazprom intends to finance construction of the North European Gas Pipeline independently. In the spring of this year, the German Bundestag stated that former German chancellor Gerhard Schroeder illegally gave Gazprom government guarantees on $1 billion in credit from German banks. Gazprom then said that it had not taken that credit and would not. Gazprom has yet to announce the completion of financing of the project. There were plans for Gazprom to cooperate with the German E.ON/Ruhrgas, but a series of disagreements seems to have derailed those plans. Gazprom declined to comment on those relations yesterday. Analysts note that the deal announced yesterday looks forced. "Investing more than 20 percent of the fund's reserves in not the most liquid shares is ineffective from the point of view of capital management and unjustified from the point of view of risk management," commented Alexey Shkrapkin, general director of the Kapital management company.