Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Kudrin: Eurobond Not Needed Now

Russia can get by without issuing Eurobonds in 2002 if state-controlled oil company Slavneft is privatized at a high enough price, Finance Minister Alexei Kudrin said Friday.

"Certainly the sale of Slavneft, if it is successful, would practically eliminate the need to borrow on foreign markets. But this is if the price is acceptable," Kudrin said.

The government on Friday published the order to privatize 75 percent of Slavneft, instead of the initially planned sale of 19.62 percent this year and 5 percent in 2003.

The order said proceeds from the sale should be received before Feb. 15, 2003.

"Even if we sell Slavneft at the minimum price, we can get by without borrowing," Kudrin said. He did not specify the government's minimum price.

Property Ministry spokesman Alexander Parshukov said $1.3 billion was the minimum price at which the government would sell the Slavneft stake.

Russia's budget allows it to issue up to $2 billion in Eurobonds this year. Kudrin has said the government was eyeing a $1.5 billion issue. But the government has said it would postpone it if global conditions were unfavorable.

Slavneft is one of the last Russian oil companies to be privatized. Its sale would top up a special reserve fund created to ease the country's foreign debt servicing, expected to peak at $17.9 billion in 2003, Kudrin said

He said the reserve fund would reach its planned level in February if Slavneft was sold.

Earlier this year Russia postponed the sale of a 5.9 percent stake in its largest oil producer LUKoil, saying it would wait for better economic conditions.

Kudrin said the LUKoil stake could be floated in 2003 to help fill out the reserve fund.

Russia controls 75 percent of Slavneft, neighboring Belarus controls 11 percent and a consortium of private firms, including the country's fourth-largest producer, Tyumen Oil Co., and fifth-largest, Sibneft, own the remaining 13 percent.