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. Last Updated: 07/27/2016

Rosneft Plans to Raise $20Bln in Share Offer

State oil major Rosneft wants to raise up to $20 billion when it places up to 30 percent of its shares on Russian bourses and in London next year, the firm said in documents obtained by Reuters on Wednesday.

The company wants to secure a listing on the Russian RTS and MICEX bourses in April and begin the London part of the initial public offering on June 26, the documents said.

The IPO is likely to become Russia's largest ever and will be part of a complex Kremlin scheme to secure greater control over strategic energy resources.

Rosneft will channel about $7.6 billion raised in the IPO to repay its debt to the foreign banks that helped the state buy a controlling stake in gas monopoly Gazprom. The remaining $12 billion will fund a repayment of other debts at Rosneft, which became heavily leveraged last year when it bought Yuganskneftegaz, the former core unit of fallen oil firm Yukos, for $9.3 billion.

The documents said Rosneft wanted to finish consolidating its units and switch to a single parent-company share by March or April. The plan would include Yugansk, as Yukos still controls preferred shares in the unit.

Rosneft would then raise as much as $2 billion to $4 billion inside Russia by selling its shares on the RTS and MICEX exchanges and via state-controlled Sberbank to private investors.

After raising the remaining $16 billion to $18 billion via a placement of Global Depositary Receipts in London, Rosneft would remain 64.1 percent controlled by the state.

About 27.5 percent of its stock would be freely floated, Yukos would own 4.3 percent, minority shareholders in other Rosneft units would control 2.1 percent, and Rosneft's management would be granted 2 percent in stock options.

The acquisition of Yugansk, which produces more than 1 million barrels per day, propelled mid-sized Rosneft to become the country's No. 3 oil producer, behind LUKoil and TNK-BP.

The documents said Rosneft expected its market capitalization to rise to $72 billion -- above LUKoil's current value of $50 billion and TNK-BP's $40 billion -- after the IPO, but analysts said they were skeptical about the plan.

"The figure of $72 billion is very aggressive. ... The firm today is smaller than LUKoil and TNK-BP, while its debts are much bigger," said Oleg Maximov of Troika Dialog.

Steven Dashevsky of brokerage Aton said Rosneft had yet to prove that it could boost production and meet high corporate governance standards to become popular with investors.

"The information which investors currently have does not justify this extremely optimistic assessment," he said.

The firm foresees strong production growth in the years to come and wants to boost production by 8 percent in 2006 to 1.63 million bpd, to 1.75 million bpd in 2007, to 1.85 million bpd in 2008 and to 2 million bpd by 2009.

To achieve these ambitious targets, Rosneft wants to spend $17.4 billion on investment from 2006 to 2010, excluding new large acquisitions the company also plans. The company wants to spend at least $4 billion on acquiring almost all the major new oil and gas fields that the state plans to auction in 2006.