Citigroup to sell Rosneft shares
Citigroup is selling about $1 billion worth of its stock in Rosneft, Russia's largest oil company. The group is offering 110 million shares at $9.1 each, according to an e-mail sent to Citigroup’s clients, RBC Daily reports.
The amount to be sold is about 1 percent of Rosneft’s capitalization, which is estimated at $98 billion. Ian Villiers, a London-based spokesman for Citigroup, declined to comment. According to RBC Daily, the transaction has not been committed yet.
This is not the first time that shareholders are selling their large stakes in the oil company, which had an IPO in the summer of 2006. In December 2007, rumors spread that several prominent businessmen, including Oleg Deripaska, might sell their stakes in Rosneft, as they were disappointed by low returns on investment.
Analysts say Citigroup decided to sell its stake in Rosneft in order to solve its liquidity problems caused by the US mortgage crisis. The stock is likely to be purchased by one or several large strategic investors, experts believe.
Rosneft’s authorized capital currently stands at RUB 105,981,778.17, or approx. $4.3 million (10,598,177,817 ordinary shares at a nominal value of RUR 0.01). Rosneftegaz has a 75.16 percent stake in Rosneft, and the rest of its stock is owned by a wide range of strategic, institutional and individual investors. Rosneft’s total debt stood at about $27 billion at the end of 2007.
Citigroup, created in 1998 by the merger of Citicorp and Travelers Group, is one of the world’s largest financial corporations. The company is based in New York.