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. Last Updated: 07/27/2016

Alfa Group Wins 40% Of Tyumen

COMBINED REPORTS


Russia's powerful Alfa Group won a controversial investment tender for 40 percent of Tyumen Oil Co., paying $820 million, Alfa-Bank spokesman Andrei Galiyev said Friday.


"Yes, we won the tender," he said. He said the group bid for the stake through its unit Novy Kholding.


"We bid $820 million under the terms of the tender," he said, adding that the total covered the price of the shares and required investments over two years.


Galiyev said the second-place bid came from Astra, an unknown company backed by Russian commercial bank National Reserve Bank, which offered 2.9 trillion rubles ($501 million).


"Alfa is a good, big company, and we will find the money for this long-term project," he said. "We are diversifying."


The way was cleared for the tender to proceed when a Tyumen regional arbitration court Sunday canceled an injunction prohibiting the tender.


Alfa Bank's victory comes despite efforts by Viktor Paly, who heads Tyumen Oil's subsidiary Nizhnevartovskneftegaz, to stop the auction from going ahead.


Paly accused officials of the State Property Fund of having connived with Tyumen Oil to rig the tender in favor of Alfa Group. Tender conditions specify that the winner must purchase oil refining machinery worth $40 million from Alfa subsidiary Alfa-Eko. Paly alleged that the equipment is worth just $2,000.


Alfa Group includes Alfa Bank as well as the prominent Alfa Eko commodity trading arm. Pyotr Aven, who was Russia's foreign trade minister in 1992, heads Alfa Bank and is part of an elite group of bankers and businessmen who are said to have supported President Boris Yeltsin's 1996 re-election.


Tyumen Oil officials had said the 40 percent stake carried a minimum price tag of around $20 million for the shares and $160 million in investment over two years. But Galiyev said officials had pegged $635 million as a more realistic minimum price.


The Tyumen Oil tender is one of the last sell-offs of a major vertically integrated oil company. Tyumen, whose major production unit is Nizhnevartovskneftegaz, accounted for about 7 percent of Russia's total crude oil output last year. ()