Rosneft Pledges to Buy Out Minority Shareholders in TNK-BP

MOSCOW (AP) -- The chief executive of Russian state-owned oil giant Rosneft pledged on Friday to offer to buy out minority shareholders in oil firm TNK-BP.

TNK-BP, Russia's third-largest oil company, was taken over by Rosneft last year. Since the deal, international minority investors holding some 5% in TNK-BP have been left in limbo and unable to find other buyers for their stakes.

The value of the investors' shares have halved since Rosneft agreed to buy the company from a group of Russian billionaires and British company BP. Foreign investors have been citing the case of the TNK-BP investors as an example of bad corporate governance in Russia.

Speaking at an investment conference in Sochi on Friday, Prime Minister Dmitry Medvedev floated the idea of a buyout, saying in televised remarks that it "would improve the investment climate in the case of this company."

Rosneft CEO Igor Sechin, who was on stage one seat away from Medvedev, agreed with the suggestion, although he noted that Rosneft "had no legal obligations" to buy out the minority shareholders.

"Have you got enough money for that?" Medvedev asked Sechin, who assured the premier: "The company does have the money."

Shares in TNK-BP soared 12% on the comments.

It is not uncommon in Russia for top officials including President Vladimir Putin to make "suggestions" to state-controlled and private companies on key investment decisions.

Sechin told Russian news agencies that Rosneft's board of directors will convene later on Friday to approve the buyout. The company is planning to buy the shares at the 18-month average price, he was quoted as saying.

Rosneft previously approved plans to pull out billions of dollars from TNK-BP subsidiaries as loans and indicated that it would not be paying a dividend for the previous fiscal year to TNK-BP shareholders.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2658556, ~/Articles/ArticleHandler.aspx, 4/24/2014 11:48:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 2 hours ago Sponsored by:
DOW 16,501.65 0.00 0.00%
S&P 500 1,878.61 3.22 0.17%
NASD 4,148.34 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

4/24/2014 4:00 PM
BP $49.39 Up +0.58 +1.19%
BP p.l.c. (ADR) CAPS Rating: ****

Advertisement