• Wednesday, 16 May, 2012

Stock funds turn up gas at Novatek

 11 February 2005 00:10 GMT

One of the main shareholders of Russia's largest independent gas company Novatek has raised $100 million by placing 3% of the company's stock with Western portfolio investors.
The shareholder, whose name was not disclosed by the company but is identified by market insiders as Cyprus-registered fund SWGI Growth, intends to lend the proceeds to Novatek so that it can buy out minority shareholders that are still holding stakes in gas producing units and boost its interests in them to 100%.

SWGI Growth is understood to be controlled by Joseph Levinson, deputy governor of the Yamal-Nenets autonomous region in West Siberia where Novatek has its main gas properties.

According to Troika Dialog brokerage in Moscow, which led the placement, the transaction values Novatek at around $3.32 billion.

The placement was oversubscribed, with applications coming from more than 80 Russian and international investors, Troika said.

Novatek has said that it intends to boost gas production substantially this year to between 25 billion and 27 billion cubic metres of gas, compared with 21.6 Bcm in 2004.

The growth of production last year was curtailed by problems with access to Russia's gas trunk pipeline network, which is owned and operated by gas monopoly Gazprom.

Troika analysts estimate that the company will be able to grow its revenues from $916 million in 2004 to $1.2 billion this year, as the company is stepping up development of its core Yurkharovskoye gas field in the Yamal-Nenets region, "reflecting the confidence that the volumes can be marketed".

Analysts in Moscow expect that Novatek will be able to obtain a listing on the London Stock Exchange by the end of 2005.

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