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. Last Updated: 07/27/2016

Gazprom Board OKs Plan to Raise $1Bln

Gazprom will shed an estimated $270 million worth of assets this year and issue up to $750 million worth of Eurobonds as early as April, board member Boris Fyodorov said Monday.

Fyodorov, speaking in a conference call with investors after Gazprom's monthly board meeting, said CEO Alexei Miller and his new management team were "putting [Gazprom's] house in order." Miller was tapped by President Vladimir Putin last May to replace the long-serving Rem Vyakhirev, who ruled over a tight-knit group that ran the sprawling gas empire like their personal fiefdom.

"Since October, the new management started showing signs of maturity. Personally, I think that so far, they are performing much better than many people expected. … I think the process of putting the house in order is under way," Fyodorov said.

After being chastised at December's meeting, Fyodorov said management finally produced a well analyzed list of Gazprom assets it wants to sell that are either inefficient or in non-core areas — such as its politically sensitive stake in NTV television.

The list includes 80 enterprises in which Gazprom directly holds less than 50 percent stakes, which are valued at 13 billion rubles, and 25 enterprises that Gazprom has little control over despite owning controlling stakes, which are valued at 9 billion rubles.

One of the assets it plans to liquidate is controversial Gazprom-Media, which last year created an international scandal by taking over the remains of Vladimir Gusinsky's Media-MOST empire, including NTV. Fyodorov said the board would consider liquidation plans for Gazprom-Media at next month's meeting.

"Today we had a much more detailed and clear cut professional plan for property management that gave a very clear picture of what Gazprom is today," Fyodorov said.

The board also touched on the long-planned Eurobond.

"The time is much more appropriate now than it was in October or November last year when the management was insisting that we go ahead," Fyodorov said, adding that the final decision will be made after the government makes up its mind on its own Eurobond issue, also scheduled for this year. However, the delay is likely to be as short as days, Fyodorov said, adding that Gazprom could technically be prepared to float between $500 million and $750 million of debt paper as early as April.

Another thorny issue is research and development. With a yearly budget of about $100 million, Gazprom research and development facilities employ several thousand people. But the operation is so commercially inefficient that Gazprom often finds itself having to pay commercial rates for research it has already funded.

"It is clear that there are lots of black holes inside Gazprom that should be investigated," Fyodorov said.

One issue that wasn't discussed, at the request of the government, Fyodorov said, was Gazprom's relations with Unified Energy Systems, but that didn't stop Fyodorov from talking about it.

"In a way, Gazprom subsidizes [UES] and then UES [turns around and] exports electricity," he said. "Russia imports gas from Turkmenistan at international prices and UES … tries to sell electricity at prices that do not sustain gas imports — it is a little bit funny."

Gazprom's board also scheduled the annual shareholders meeting for June 28.