The Russian pipe-line monopoly Transneft is studying a possibility to issue European bonds and Level I ADR for its senior stock. The company officials are sure of the appearance in the world market allowing to Transneft to make a name in the West and later to draw cheap credits to its projects.
According to Richard Stron, the chief of the company corporation financing department, European bonds and ADR could appear already in 2003. The question about issuing them will be in the nearest future considered by the company administration which should take a decision about expedience of such investment. The question is about issuing Level I ADR for the company senior stock which makes 25 percent of the authorized capital. 10 or 20 ADR are planned to be issued per every stock. 9 thousands of natural and juridical persons possess now preference shares of the company. While Transneft company itself does not posses them. At the same time, 75 percent of usual voting stock belong to the state.
Our stock is not as known as that one of Gazprom company. Though, we plan to send a letter to the investors, - Richard Stron said. According to him, appearing in the US market is, first of all, a PR-action which will allow to Transneft to manifest in the West. Stock analysts in Russia differently, though on the whole positively, estimate the Transneft prospect of success. For example, the Alfa-Bank analysts suppose that the Transneft attractiveness will really grow, if the company starts selling ADR for usual stock, too. Though, the government seems to be not prepared yet for sharing its power in the company with foreigners.
In the meanwhile, Transneft needs capital afflux to realize its ambitious projects valued at billions of dollars, this is why it considers different variants of its entrance to the world market. Distribution of Level I ADR, according to the specialists of Linia Prava company, would rather draw away capital from Transneft. However, this action is not aimed for drawing capital. This is a step towards creating the market of this paper. Transneft will most likely buy up its senior stock to distribute ADR then.
While investors are sure that Transneft already secretly carries out some negotiations about buying back its senior stock from stick holders. After the company gets it to its balance, it could favourably sell it through ADR to the West. This was this rumour which caused growing up quotation of the monopoly paper. Analysts of the United Financial Group are sure that the Transneft senior stock is underestimated (today a preference share costs $ 380, while its real price is up to $ 487 and in a year it could grow up to $ 590), so they advise to their clients to buy preference shares.
On the threshold of its entrance to the world market, Transneft makes efforts to better its investment attractiveness in the Russian market, too. The day before yesterday, Transneft got listing in Moscow Interbank Currency Exchange. Securities of this monopoly were included into the Level I quoting list, which will certainly increase its liquidity. Moreover, this September the company expects to get official listing in Russian Goods and Raw Materials Exchange.
Dmitry Slobodyanyuk PRAVDA.Ru
Translated by Vera Slovieva
Read the original in Russian: http://pravda.ru/main/2002/07/24/44632.html
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