Wednesday, September 24, 2008
Gazprom shrugs off credit crunch
23 September, 2008 - Upstream OnLine - Russian gas giant Gazprom, which is carrying debt of more than $50 billion, has not suffered in the global financial crisis and is confident it will be able to fund all its projects in due course, company boss Alexei Miller said today. Gazprom's capitalisation almost halved to $193 billion last week with the dive in the Russian share market. "We see no risks for the company. The interest from financial credit institutions wanting to lend to Gazprom is as big as it was before the crisis," financial daily Kommersant quoted Miller as saying. "That is why this crisis has not touched Gazprom at all. We are firmly standing on our feet, we are financially stable and will fund our investment programme which is rising from year to year," Miller added. Gazprom, which usually revises its investment programme several times a year, is expected to consider increasing it soon from the earlier approved 821.7 billion roubles ($33 billion) for this year. A source close to Gazprom's board of directors told Reuters the gas company was planning to cut its huge debt this year. The source said Gazprom, whose board is expected to discuss the debt situation at a meeting on 30 September, plans to "cut the debt to the level of the previous years", but did not elaborate. Gazprom's consolidated debt stood at 1.2 trillion roubles ($48 billion) at the end of 2007, up 52% year-on-year, after the company took control both of the Sakhalin 2 project and of Moscow utility Mosenergo . Kommersant quoted documents prepared for the meeting as showing that the company was by the end of this year going to cut its consolidated debt, comprising the debts of all its subsidiaries, to 920 billion roubles, the same amount as Gazprom's head company had at the end of last year. A part of the reduction, 360 billion roubles, is expected to be written off from Gazprom's balance sheet after the gas company cuts its stake in Gazprombank, once its main banking arm, said the paper. Kommersant also said that, according to the documents, Gazprom plans to refinance or repay from its own funds most of the debt taken on in 2007 and is also not planning any acquisitions before the end of the year.