Russia’s Federal Antimonopoly Service (FAS) has approved Russian diamond monopoly Alrosa’s acquisition of 100% stakes in Urengoi Gas Co. and Geotransgas, the FAS said this week. Both companies belonged to Alrosa’s subsidiary, Sunland Holding of Switzerland.
Russia’s Federal Antimonopoly Service (FAS) has approved Russian diamond monopoly Alrosa’s acquisition of 100% stakes in Urengoi Gas Co. and Geotransgas, the FAS said this week. Both companies belonged to Alrosa’s subsidiary, Sunland Holding of Switzerland.
Their transfer to Russian jurisdiction will help increase investment in the two companies, and will provide more transparency in their management systems, Alrosa said.
Alrosa sold 90% stakes in Geotransgas and Urengoi Gas Co. to VTB Capital for $620 million ($480 million and $140 million, respectively) in October 2009, in a repurchase agreement with the aim of reducing its debt burden. Alrosa announced it would buy out the gas assets from VTB in October 2011.
Alrosa consolidated 100% of shares in Geotransgas and Urengoi Gas after buying 90% stakes in both companies for $1.04 billion. This figure includes $620 million paid by VTB entities for the gas assets in 2009. Alrosa paid another $100 million to Metropol, which owned 10% stakes in the companies.
Alrosa later clinched an agreement of intent with Zarubezhneft for the sale of 25% plus one share in Geotransgas and a 26% stake in Urengoi Gas. The deal with Zarubezhneft was based on a $1 billion valuation of the two companies. The deal was supposed to have taken place by the first half of the year, but has yet to be concluded. Consequently, Alrosa was not ruling out the sale, and divesting itself of the companies as non-core operations.
The amount of capital expenditure planned for the Alrosa gas assets for the next four years is up to $400 million. After production and gas sales targets are met, both enterprises will be generating revenues of roughly $380 million per year. Alrosa estimated both companies will have fully paid for themselves by 2018 or 2019.
Geotransgas and Urengoi Gas operate in the Beregovoi and Ust-Yamsoveisky blocks in the Yamal Nenets Autonomous District. The companies’ combined proven and probable reserves stand at more than 140 billion cubic metres of gas and 20 million tons of gas condensate, to amount to more than 1 billion barrels of oil equivalent, according to an audit conducted by DeGolyer & MacNaughton in mid-2011.
FAS approves Alrosa gas assets transfer
Russia’s Federal Antimonopoly Service (FAS) has approved Russian diamond monopoly Alrosa’s acquisition of 100% stakes in Urengoi Gas Co. and Geotransgas, the FAS said this week. Both companies belonged to Alrosa’s subsidiary, Sunland Holding of Switzerland.
Russia’s Federal Antimonopoly Service (FAS) has approved Russian diamond monopoly Alrosa’s acquisition of 100% stakes in Urengoi Gas Co. and Geotransgas, the FAS said this week. Both companies belonged to Alrosa’s subsidiary, Sunland Holding of Switzerland.
Their transfer to Russian jurisdiction will help increase investment in the two companies, and will provide more transparency in their management systems, Alrosa said.
Alrosa sold 90% stakes in Geotransgas and Urengoi Gas Co. to VTB Capital for $620 million ($480 million and $140 million, respectively) in October 2009, in a repurchase agreement with the aim of reducing its debt burden. Alrosa announced it would buy out the gas assets from VTB in October 2011.
Alrosa consolidated 100% of shares in Geotransgas and Urengoi Gas after buying 90% stakes in both companies for $1.04 billion. This figure includes $620 million paid by VTB entities for the gas assets in 2009. Alrosa paid another $100 million to Metropol, which owned 10% stakes in the companies.
Alrosa later clinched an agreement of intent with Zarubezhneft for the sale of 25% plus one share in Geotransgas and a 26% stake in Urengoi Gas. The deal with Zarubezhneft was based on a $1 billion valuation of the two companies. The deal was supposed to have taken place by the first half of the year, but has yet to be concluded. Consequently, Alrosa was not ruling out the sale, and divesting itself of the companies as non-core operations.
The amount of capital expenditure planned for the Alrosa gas assets for the next four years is up to $400 million. After production and gas sales targets are met, both enterprises will be generating revenues of roughly $380 million per year. Alrosa estimated both companies will have fully paid for themselves by 2018 or 2019.
Geotransgas and Urengoi Gas operate in the Beregovoi and Ust-Yamsoveisky blocks in the Yamal Nenets Autonomous District. The companies’ combined proven and probable reserves stand at more than 140 billion cubic metres of gas and 20 million tons of gas condensate, to amount to more than 1 billion barrels of oil equivalent, according to an audit conducted by DeGolyer & MacNaughton in mid-2011.