Russia is considering selling nearly one-fifth of the state oil company Rosneft to "strategic investors" in a private transaction rather than trying to raise the money through a public offering, Rosneft's chief executive said.
In an interview with the Italian newspaper Il Sole 24 Ore on June 14, Rosneft CEO Igor Sechin said the oil giant is not fairly valued on global markets currently because of Russia's depressed economy, low oil prices, and Western economic sanctions.
Russia's Economic Ministry estimates it could raise about 700 billion rubles ($10.5 billion) to help close Russia's budget gap from privatization of a 19.5 percent stake at this time.
"Given the situation in the world oil market and the sanctions, the company's current price quotations hardly meet its fundamental value," Sechin said.
For that reason, before selling a stake to investors, the company will focus for a time on trying to increase the value of its stock, he said.
"Meeting this challenge will contribute to, among other things, maximizing state revenue from the possible sale of its stake," he said.
