• Wednesday, 16 May, 2012

Novatek to accelerate share offer

 01 April 2005 08:34 GMT

The directors of Russia's largest independent gas producer, Novatek, have resolved to speed up a placement of the company's shares on international stock markets following ongoing uncertainty on the fate of a deal with France's Total.
Novatek's initial public offering is now expected to be ready to go ahead by the end of this year's third quarter.

Initially, the company was to offer up to 10% of its stock to Western investors. However, there are suggestions that the size of the IPO may be increased to up to 25% of the company's total outstanding shares.

This will happen if Novatek and Total fail to receive Russian approval for the September deal under which Total committed to buy a 25% stake in Novatek for around $850 million.

Russia's anti-monopoly ministry was due to approve Total's purchase in October last year, but the French outfit is still waiting.

According to Moscow business daily Kommersant, Novatek urgently needs a cash injection to complete the consolidation of its gas producing assets under its full control.

Novatek's directors have also approved the release of the company's financial results for the past year under local accounting standards

Revenues were up 92% to $830 million on gas sales of 16 billion cubic metres and 23 million barrels of liquids. Net profits jumped 88% to $185 million.

Investors are now waiting for Novatek's 2004 results under the US generally accepted accounting principles standards, which will show the overall picture of its financial health, including its numerous subsidiaries.

Russian accounting rules oblige Novatek to report just its own financial activity and exclude results of its units.

Analysts in Moscow said that Novatek's US GAAP report for 2004 will likely be ready in June.

As Novatek prepares for the IPO, its shareholders approved raising a total of $70 million in short-term loans from shareholder Cyprus-registered SWGI Growth fund. The loans are equal to about 9% of the company's book value, Novatek said.

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