ROSN.L Regulatory News (ROSN)

14 Jul 2006 09:41

OJSC OC Rosneft14 July 2006 This document is not a prospectus but an advertisement. Investors should not subscribe for any transferable securities referred to in this announcement except on the basis of information in the prospectus. Rosneft Announces Offer Price for Initial Public Offering The boards of directors at OJSC OC Rosneft and OJSC Rosneftegaz have determinedthe price for one share or one Global Depositary Receipt (GDR) representing oneshare, as well as the volume of shares and GDRs sold. The price is set at USD7.55 per common share or GDR ("Offer Price"). The number of shares and GDRs soldby Rosneftegaz is 1,126,357,616 for gross proceeds of USD 8.5 billion. Rosneftwill sell 253,874,997 shares in the form of GDRs for gross proceeds of USD 1.9billion, prior to any shares sold via over allotment option (discussed below).The total amount of funds to be raised in the offering is USD 10.4 billion,which makes Rosneft's IPO the fifth largest in the world and the largest amongRussian companies. Due to the function of the volume and Offer Price, Rosneft's capitalizationstands at USD 79.8 billion, taking into account the exchange of shares inconnection with the consolidation of minority interests in a number ofsubsidiaries. This makes Rosneft the second highest ranked Russian company interms of capitalization. It is expected that the consolidation of the Company'smain subsidiaries will be completed by the end of 2006. At the Offer Price, the offering was oversubscribed by a factor of approximately1.5, with demand standing at around USD 15 billion, being the largest numberever recorded among Russian public offerings. Demand from various investors canbe characterized as the following: strategic investors -21%, internationalinvestors from the United States, Europe and Asia - 36%, Russian investors -39%, Russian retail investors - 4%. Russian retail investors submitted over115,000 subscriptions, which makes Rosneft one of the largest Russian companiesby number of private Russian investors. Funds raised by Rosneftegaz will be used to pay off a syndicated loan of USD 7.5billion that was taken out in September 2005 for the acquisition of a 10.74%stake in Gazprom, payment of income taxes on the sale of shares, as well as bankcommissions on the transaction. Funds raised by Rosneft will be used to retireexisting debt, fund its ongoing investment program and for general corporatepurposes. Rosneft's shares have been listed and will begin trading on Russia's RTS andMICEX exchanges. GDRs will be traded on the London Stock Exchange followingadmission by the UK Financial Services Authority, which is expected to happen onJuly 19. The Joint Global Coordinators for the offer were ABN AMRO Rothschild, DresdnerKleinwort (the investment division of Dresdner Bank AG), J.P.Morgan SecuritiesLtd., and Morgan Stanley & Co. International Limited. Sberbank acted as theCoordinating Lead Manager of the Russian Offering. Co-Managers for the RussianOffering (including the retail offering) include Alfa Bank, Aton, Gazprombank,Renaissance Capital, Troika Dialog, Deutsche UFG and Uralsib. As part of the share placement, Rosneft granted the Joint Global Coordinators anover allotment option giving them the right to purchase 52,980,132 shares in theform of GDRs at the Offer Price, which is approximately 4% of the total numberof shares and GDRs placed. In the event the over allotment option is exercised,Rosneft's capitalization will stand at USD 80.2 billion. NOTES FOR EDITORS Rosneft is a vertically integrated oil and gas company with upstream anddownstream operations located principally in Russia. Rosneft had at 31 December2005 18.9 billion boe of proved (SPE) reserves, including 14.9 billion barrelsof proved crude oil reserves and 24.4 trillion cubic feet of gas. Based onproduction rates for 2005, the Company's proved reserves will last for 28 years. Rosneft operates eleven oil and gas producing enterprises across Russia as wellas a portfolio of exploration projects located in strategic areas includingRussia's Far East, Eastern Siberia, the Black Sea and the Caspian Sea. Inaddition to its strong upstream operations, the Company also owns four loadingterminals and two refineries, which have a combined capacity of 10 million tonsper year, as well as a nationwide network of over 650 service stations. Rosneft's total revenues increased from approximately USD 3.6 billion in 2003 toapproximately USD 5.3 billion in 2004 and to approximately USD 24.0 billion in2005. Rosneft's total revenues increased from approximately USD 4.4 billion inthe first quarter of 2005 to approximately USD 7.5 billion in the first quarterof 2006. Similarly, Rosneft's net income increased from approximately USD 0.39billion in 2003 to approximately USD 0.84 billion in 2004 and to approximatelyUSD 4.16 billion in 2005. Rosneft's net income increased from approximately USD0.72 billion in the first quarter of 2005 to approximately USD 0.80 billion inthe first quarter of 2006. OJSC OC Rosneft Information Division +7 495 221 31 07 phone n_manvelov@rosneft.ru June 26, 2006 For further information please contact: OJSC OC Rosneft Investor Relations a_bogdanchikov@rosneft.ru +7 495 221 35 55 phone Brunswick Group Tel: +44 207404 5959 Andrew Hood Patrick Handley Jonathan Rhodes Pavla Shaw *NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN Some of the information in this press release may contain projections or otherforward-looking statements regarding future events or the future financialperformance of the Company. You can identify forward looking statements by termssuch as "expect," "believe," "anticipate," "estimate," "intend," "will,""could," "may" or "might" the negative of such terms or other similarexpressions. The Company wishes to caution you that these statements are onlypredictions and that actual events or results may differ materially. The Companydoes not intend to update these statements to reflect events and circumstancesoccurring after the date hereof or to reflect the occurrence of unanticipatedevents. Many factors could cause the actual results to differ materially fromthose contained in projections or forward-looking statements of the Company,including, among others, general economic conditions, the competitiveenvironment, risks associated with operating in Russia, market change in the oiland gas industry, as well as many other risks specifically related to theCompany and its operations. Neither this press release nor any copy of it may be taken or transmitted intothe United States, Australia, Canada or Japan. This press release does notconstitute or form part of any offer or invitation to sell, or any solicitationof any offer to purchase nor shall it (or any part of it) or the fact of itsdistribution, form the basis of, or be relied on in connection with, anycontract therefor. The offer and the distribution of this press release andother information in connection with the listing and offer in certainjurisdictions may be restricted by law and persons into whose possession anydocument or other information referred to herein comes should inform themselvesabout and observe any such restriction. Any failure to comply with theserestrictions may constitute a violation of the securities laws of any suchjurisdiction. This communication is only directed at (i) persons who are outside the UnitedKingdom or (ii) to investment professionals falling within Article 19(5) of theFinancial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the"Order") or (iii) high net worth entities, and other persons to whom it maylawfully be communicated, falling within Article 49(2)(a) to (d) of the Order(all such persons together being referred to as "relevant persons"). The GDRsare only available to, and any invitation, offer or agreement to subscribe,purchase or otherwise acquire such securities will be engaged in only with,relevant persons. Any person who is not a relevant person should not act or relyon this communication or any of its contents. Stabilisation/FSA. Any offer of securities to the public that may be deemed to be made pursuant tothis communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State,the "Prospectus Directive") is only addressed to qualified investors in thatMember State within the meaning of the Prospectus Directive. This document is an advertisement for the purposes of the applicable measuresimplementing the Prospectus Directive. A prospectus prepared pursuant to theProspectus Directive is intended to be published, which, if published, will bemade available to the public in accordance with the applicable rules. These materials are not an offer for sale of any securities of Rosneft in theUnited States. Any securities of the Company may not be offered or sold in theUnited States absent registration or an exemption from registration under theU.S. Securities Act of 1933. The Company has not registered and does not intendto register any portion of the offering in the United States or to conduct apublic offering of any securities in the United States. Information contained in this press release does not constitute a public offeror an advertisement of the GDRs in Russia, is not an offer, or an invitation tomake offers, to purchase GDRs in Russia, and must not be passed on to thirdparties or otherwise be made publicly available in Russia. The GDRs have notbeen and will not be registered in Russia and are not intended for "placement"or "public circulation" in Russia. The price and value of, and income from, the ordinary shares and GDRs may go upas well as down. Persons needing advice should consult a professional adviser. Part II Appendix - Further Details of the Offer Capitalized terms used but not defined herein shall have the meanings ascribedto them in the amended and restated preliminary prospectus dated 11 July 2006. Details of the Global Offering: • The Global Offering comprised a total of 1,380,232,613 Ordinary Shares,consisting of 1,126,357,616 existing ordinary shares to be sold in the form ofOrdinary Shares and GDRs by Rosneftegaz, the Company's core shareholder, and253,874,997 new Ordinary Shares to be issued by the Company and sold in the formof GDRs (assuming no exercise of the Overallotment Option described below). TheOffer Price per Ordinary Share and per GDR is U.S.$7.55 • Rosneftegaz will raise gross proceeds of USD8,504 million from the GlobalOffering which will be used to repay a USD7,500 million syndicated bridge termloan facility (including interest thereon) entered into in September 2005 with,among others, the Joint Global Coordinators of the Global Offering and accruedinterest on the facility, as well as to pay taxes including those on profitrealized from the sale of the existing Ordinary Shares sold and fees to theManagers of the Global Offering. The net proceeds of the Global Offering toRosneftegaz will be approximately USD8,393 million (after the payment ofcommissions but prior to the deduction of out-of-pocket expenses and any otherfees). Such repayment by Rosneftegaz will terminate the Company's guarantee ofthat facility. • The Company will raise gross proceeds of USD1,917 million from the GlobalOffering (assuming no exercise of the Overallotment Option described below)which will be used to retire existing debt, fund its ongoing investment programand for general corporate purposes. The net proceeds of the Global Offering tothe Company will be approximately USD1,892 million (after the payment ofcommissions but prior to any other fees and assuming full reimbursement ofout-of-pocket expenses and no exercise of the Overallotment Option). • In connection with the Global Offering, the Company has granted to theJoint Global Coordinators, on behalf of the Managers, an Overallotment Option topurchase at the Offer Price up to an additional 52,980,132 Ordinary Shares inthe form of GDRs, exercisable within 30 days from today's date. • A significant portion of the Securities is being offered in the GlobalOffering to certain oil and gas companies and individuals and institutions inthe Russian Federation and elsewhere. Four investors (including oil and gascompanies) each intend to purchase more than 5% of the Securities in the GlobalOffering, accounting for approximately 49.4% of the Global Offering, and fourinvestors (including oil and gas companies) each intend to purchase more than 5%of the GDRs in the GDR Offering, accounting for approximately 51.2% of the GDROffering, in each case assuming the exercise of the Overallotment Option. • 99,431,775 Ordinary Shares are being offered to retail investors inRussia. • The number of Ordinary Shares outstanding following the Global Offeringat admission will be 9,346,048,997, rising to up to 10,568,108,379post-consolidation (assuming, in each case, no exercise of the OverallotmentOption). • Conditional dealings in the GDRs on a "when issued" basis are expected tocommence on the London Stock Exchange at 11.00am today under the symbol "ROSN". • The GDRs are expected to be admitted to listing on the Official List ofthe U.K. Financial Services Authority and admitted to trading on the LondonStock Exchange on or about 19 July 2006. • The Company's Ordinary Shares have been admitted to listing and tradingon the RTS Stock Exchange and the Moscow Interbank Currency Exchange under thesymbol "ROSN", and the Company expects trading in the Ordinary Shares on the RTSand MICEX to commence on or around 19 July 2006. Number of GDRs in respect of which the Company has applied to the FSA foradmission: 9,399,029,129, of which: • the number of GDRs to be issued on the Closing Date: 867,172,695; and • the maximum number of GDRs which may be issued from time to time against the deposit of Ordinary Shares with the Depositary: 8,531,856,434. Name of the Stabilizing Manager: Morgan Stanley & Co. International Limited. Yukos complained to the FSA and to the LSE objecting to the proposed admissionof the GDRs to the official list and to the market for listed securities throughthe IOB, and threatened to seek 'judicial review' of any decision in favor ofAdmission. On 11 July 2006, the FSA notified Yukos that it would approve theprospectus and admit the GDRs to listing in the normal way. The LSE alsorejected Yukos' complaint. On 13 July 2006, as threatened, Yukos filed a claimwith the High Court of Justice Administrative Court in London seeking judicialreview of the favorable decisions of the FSA and the LSE. Yukos requests thecourt to quash the FSA and LSE decisions and, if the matter cannot be resolvedbefore Admission, to stay or enjoin their effectiveness pending judicial reviewand potential appeal. The Company understands that the FSA and LSE are opposingYukos' claims. Percentage of outstanding Ordinary Shares directly owned by Rosneftegaz andbeneficially owned by the Russian government after the Global Offering assumingno exercise and full exercise of the Overallotment Option respectively: 85.2%and 84.8%. Up to 1,222,059,382 Ordinary Shares will be offered to minority shareholders inthe Merging Subsidiaries in the Share Swap. This will represent approximately11.6% of the Company's total shares following completion of the Share Swap andthe Global Offering (or approximately 11.5% assuming that the Managers exercisethe Overallotment Option in full). Capitalization: The following figures are Rosneft's cash and cash equivalents, short-term loansand current portion of long-term debt and total capitalization as of 31 March2006 as adjusted for the proceeds to the Company from the Global Offering,assuming first no exercise and then full exercise of the Overallotment Option(USD millions): • Cash and cash equivalents: 2,381/2,775; • Short-term loans and current portion of long-term debt: 3,925/3,925; • Long-term debt, net of current portion: 7,708/7,708; • Minority Interest: 1,842/1,842; • Shareholders' equity: - Common stock: 20/20; - Additional paid-in capital:1,911/2,305; - Retained earnings: 8,196/8,196; - Total shareholders' equity: 10,127/10,521; • Total capitalization (being the sum of long-term debt, net of current portion, minority interest, and total shareholders' equity): 19,677/20,071. Dilution: After giving effect to the issuance of the newly issued Ordinary Shares(excluding any Ordinary Shares that may be issued pursuant to the OverallotmentOption) as if such Ordinary Shares were issued on 31 March 2006, and afterdeducting the underwriting fees (other than any discretionary fee) and assumingfull reimbursement of offering expenses payable by the Company as of such date,Rosneft's net tangible book value as of 31 March 2006 would have been USD10,092million, and its net tangible book value per Ordinary Share would have beenUSD1.08. These figures represent an immediate accretion in net tangible book value perOrdinary Share to existing investors, and an immediate dilution in net tangiblebook value per Ordinary Share to investors purchasing Securities in the GlobalOffering, of USD 6.47 or 85.7%. The increase in net tangible book value per Ordinary Share attributable to theissuance of the newly issued Ordinary Shares as if such Ordinary Shares wereissued on 31 March 2006: USD0.18. Net tangible book value per Ordinary Share immediately after the issuance of thenewly issued Ordinary Shares as if such Ordinary Shares were issued on 31 March2006: USD1.08. Dilution per Ordinary Share to investors purchasing Securities in the GlobalOffering: 85.7%. Plan of Distribution: The Underwriting Commitments for each Manager is as follows (expressed as thenumber of Ordinary Shares (in the form of Ordinary Shares or GDRs)): 247,061,638 by ABN AMRO Bank N.V. and NM Rothschild and Sons Limited (togethertrading as ABN AMRO Rothschild) 247,061,638 by Dresdner Bank AG, London Branch 247,061,638 by J.P. Morgan Securities Ltd. 247,061,638 by Morgan Stanley & Co. International Limited 70,391,862 by Sberbank (Savings Bank of the Russian Federation) 64,870,933 by Goldman Sachs International 23,463,954 by Barclays Bank PLC 33,125,583 by Bank Austria Creditanstalt AG 33,125,583 by Daiwa Securities SMBC Europe Limited 23,463,954 by Fortis Bank (Nederland) N.V. 23,463,954 by ING Bank N.V., London Branch 33,125,583 by Natexis Banques Populaires, London Branch 2,760,465 by Open Joint Stock Company Alfa-Bank 8,281,396 by Limited Liability Company Aton 4,140,698 by Banca Caboto S.p.A. (Gruppo Intesa) 4,140,698 by Banca IMI S.p.A. 4,140,698 by Bayerische Landesbank 4,140,698 by Banco Bilbao Vizcaya Argentaria, S.A. 8,281,396 by Deutsche Bank AG 4,140,698 by Erste Bank der oesterreichischen Sparkassen AG 12,422,094 by JSB Gazprombank (CJSC) 8,281,396 by Renaissance Securities (Cyprus) Limited 4,140,698 by Standard Bank PLC 11,041,860 by The Closed Joint-Stock Company Investment Company ''Troika Dialog" 11,041,860 by OJSC Bank Uralsib Total: 1,380,232,613 The Managers will receive a combined underwriting, management and sellingcommission of USD 0.10 per Ordinary Share. The Company estimates its expenses in relation to the Global Offering, otherthan commissions, to be up to USD 40 million, which it expects to be fullyreimbursed. Accordingly, the Company does not deduct this amount for purposes ofdetermining its net proceeds from the Global Offering. * * * * * Some of the information in this press release may contain projections or otherforward-looking statements regarding future events or the future financialperformance of the Company. You can identify forward looking statements by termssuch as "expect," "believe," "anticipate," "estimate," "intend," "will,""could," "may" or "might" the negative of such terms or other similarexpressions. The Company wishes to caution you that these statements are onlypredictions and that actual events or results may differ materially. The Companydoes not intend to update these statements to reflect events and circumstancesoccurring after the date hereof or to reflect the occurrence of unanticipatedevents. Many factors could cause the actual results to differ materially fromthose contained in projections or forward-looking statements of the Company,including, among others, general economic conditions, the competitiveenvironment, risks associated with operating in Russia, market change in the oiland gas industry, as well as many other risks specifically related to theCompany and its operations. Neither this press release nor any copy of it may be taken or transmitted intothe United States, Australia, Canada or Japan. This press release does notconstitute or form part of any offer or invitation to sell, or any solicitationof any offer to purchase nor shall it (or any part of it) or the fact of itsdistribution, form the basis of, or be relied on in connection with, anycontract therefor. The offer and the distribution of this press release andother information in connection with the listing and offer in certainjurisdictions may be restricted by law and persons into whose possession anydocument or other information referred to herein comes should inform themselvesabout and observe any such restriction. Any failure to comply with theserestrictions may constitute a violation of the securities laws of any suchjurisdiction. This communication is only directed at (i) persons who are outside the UnitedKingdom or (ii) to investment professionals falling within Article 19(5) of theFinancial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the"Order") or (iii) high net worth entities, and other persons to whom it maylawfully be communicated, falling within Article 49(2)(a) to (d) of the Order(all such persons together being referred to as "relevant persons"). The GDRsare only available to, and any invitation, offer or agreement to subscribe,purchase or otherwise acquire such securities will be engaged in only with,relevant persons. Any person who is not a relevant person should not act or relyon this communication or any of its contents. Stabilization/FSA. Any offer of securities to the public that may be deemed to be made pursuant tothis communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State,the "Prospectus Directive") is only addressed to qualified investors in thatMember State within the meaning of the Prospectus Directive. This document is an advertisement for the purposes of the applicable measuresimplementing the Prospectus Directive. A prospectus prepared pursuant to theProspectus Directive is intended to be published, which, if published, will bemade available to the public in accordance with the applicable rules. These materials are not an offer for sale of any securities of the Company inthe United States. Any securities of the Company may not be offered or sold inthe United States absent registration or an exemption from registration underthe U.S. Securities Act of 1933, as amended. The Company has not registered anddoes not intend to register any portion of the offering in the United States orto conduct a public offering of any securities in the United States. Information contained in this press release does not constitute a public offeror an advertisement of the GDRs in Russia, is not an offer, or an invitation tomake offers, to purchase GDRs in Russia, and must not be passed on to thirdparties or otherwise be made publicly available in Russia. The GDRs have notbeen and will not be registered in Russia and are not intended for "placement"or "public circulation" in Russia. The price and value of, and income from, the ordinary shares and GDRs may go upas well as down. 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