Gazprom Offering $2.3 Billion Stake on Market to Raise Cash

(Bloomberg) -- Units of Gazprom PJSC plan to sell a stake of about 2.9% in the Russian natural gas producer Thursday after CEO Alexey Miller said he was looking to raise cash from quasi-treasury shares..Gerosgaz Holdings BV and Rosingaz Ltd., both 100%-owned subsidiaries, will offer 693.6 million common shares in Gazprom on the Moscow Exchange, the company said in a regulatory filing. The terms of the deal don’t allow a partial sale of the shares on offer..At Wednesday’s closing price of 212 rubles per share, the stake is worth 147 billion rubles, or $2.3 billion. Gazprom’s units received 494 bids worth a total 198.9 billion rubles, the company said in a separate filing in the evening..In June, Miller told reporters that the company was looking for “different market ways to monetize” its portfolio of quasi-treasury shares, which are owned by Gazprom’s units. That type of stock makes up about 6.64% of Gazprom’s total 23.67 billion shares outstanding. .“The reason, of course, is that today Gazprom is the leader of the Russian stock market,” Miller said, explaining why the future of quasi-treasury shares is more important today than in previous years. “Of course, the efficiency of managing its own capital is one of the key issues for company’s executives.”.Russia’s biggest natural gas producer has surprised investors this year by boosting its dividend to a record level and pledging to base future payouts on a transparent formula based on financial results. Miller has also undertaken several waves of management changes aimed at improving transparency..Gazprombank was hired to arrange the offering..Gazprom shares have advanced 61% in the past year, outpacing an 18% gain in the MOEX Russia Index. The stock rose as much as 8%, the biggest intraday gain in seven weeks, and was 5% higher at 6:24 p.m in Moscow..“In the past few days, Gazprom shares performed worse than the market,” said Alexander Orekhov, head of Russian equities at Renaissance Capital. “It’s hard to evaluate” if Gazprom’s sale will be at a discount but typically there’s a 3% to 7% one for a $300 million to $400 million placement, he said. The size of the offer means there could even be an anchor investor, according to Orekhov..VTB Capital estimates that the shares will be publicly traded after the sale, potentially increasing the company’s weighting on both the FTSE and MSCI indices..--With assistance from Andrey Lemeshko..To contact the reporters on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net;Olga Tanas in Moscow at otanas@bloomberg.net;Olga Voitova in Moscow at ovoitova@bloomberg.net.To contact the editors responsible for this story: Scott Rose at rrose10@bloomberg.net, Rakteem Katakey, Christopher Sell.©2019 Bloomberg L.P.

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Gazprom Offering $2.3 Billion Stake on Market to Raise Cash

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