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Report: Rosneft Loans Shelved

The Kremlin appears to have shelved Rosneft's plan to borrow $5.5 billion from a mystery company via its units, Vedomosti reported Monday, citing an unidentified official in the presidential administration.

By indebting its units in a possible scheme to pay for Yuganskneftegaz, Yukos' key production unit auctioned off for $9.3 billion in December, Rosneft would have hindered plans to merge the company into Gazprom, analysts said.

A senior official in the presidential administration ordered Rosneft president Sergei Bogdanchikov to cancel shareholders' meetings that were to approve the borrowing scheme, Vedomosti said. A source in Gazprom confirmed that scenario with the paper.

In a statement Friday, Rosneft said that reports of the borrowing scheme were "premature" and that the dates of the shareholder meetings may be changed or canceled. Rosneft spokesmen declined to comment Monday.

The news comes as investors watch a high-level Kremlin battle over the Rosneft-Gazprom merger, intended to give the state formal control over the gas giant and be the first step in liberalizing the Gazprom share market.

But the merger plans have been complicated by Yukos' legal maneuvering in U.S. courts and Rosneft's nontransparent purchase of Baikal Finance Group, a shell company that originally won the bidding for Yugansk.

A source close to Gazprom told Vedomosti that Rosneft's borrowing scheme was thought up to harm the merger plans.

"We will use all of our power to make sure that deals of this kind do not hinder the merger of this state-company into Gazprom," the Kremlin source told Vedomosti.

Analysts see a struggle with President Vladimir Putin's Chief of Staff Dmitry Medvedev and Gazprom CEO Alexei Miller on one side and Deputy Chief of Staff Igor Sechin on the other. Medvedev is board chairman of Gazprom and Sechin is board chairman at Rosneft.

"Both sides basically agree on the importance of the merger but they are battling for control of Gazprom," said Konstantin Simonov, director of the Center for Current Politics in Russia. "Formally Sechin supports the merger but he is trying to discredit Miller in the eyes of the president by showing that he is unable to implement this merger, which the president approved."

Yukos ramped up the pressure on Friday when it made a filing in a Houston court to seek more than $20 billion in damages from Gazprom, Rosneft, Baikal Finance Group and Gazpromneft for what it calls the expropriation of Yugansk.

Also on Friday, AK&M news agency reported that shareholders of three Rosneft subsidiaries -- Purneftegaz, Sakhalinmorneftegaz and Stavropolneft -- will vote at extraordinary meetings later this month on agreements to lend Rosneft a total of $5.5 billion. The loans would be financed by sales in promissory notes to an unknown company called Trade-Express, AK&M reported.

Alexander Voloshin, Putin's former chief of staff, helped found AK&M, which stands for "Analiz, Konsultatsy i Marketing."

(The Moscow Times 15.ii.05)

 
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