For old friendship's sake: the French increased their share in Novatek despite sanctions

The Western sanctions against the "Novatek" and its co-owner Gennady Timchenko did not prevent France's Total to increase the share of the largest independent gas producer in Russia; since the beginning of the year it could have grown by almost 3%.
Origin source

The French company Total from the beginning of the year increased the share of "Novatek" to 19.9%, reported Forbes three sources close to both companies. The interest could be more, if its increase to 20% and above did not require the approval of the Government Commission on control over foreign investments, explains one of the interlocutors.

Increase the share of "Novatek» Total wanted to secure their participation in the joint venture with the Russian oil and gas company, says one of the sources.

By 2017, China's CNPC, together with partners is preparing to launch a project to develop the Yuzhno-Tambeyskoye gas condensate field and LNG "Yamal LNG". July 14, Prime Minister Dmitry Medvedev approved the "Yamal LNG" among the four companies that received the exclusive right to export liquefied natural gas.

In Total and CNPC in the project to 20%, and "Novatek" - 60%, and the French were crucial to increase stake in Russian partner to garatirovat their investments. "We are closely monitoring the situation and sanctions against our partner"Novatek", - said the representative of the Forbes Total. - We conduct an analysis in order to understand our existing projects may be affected by whether in Russia, and to keep the current schedule. "

Total Cooperation with "Novatek" started in April 2011 and for the three Groda has managed to grow into a friendship. The French company has become a shareholder of the Russian company in April 2011 by acquiring two major owners of "Novatek" Gennady Timchenko and Leonid Michelson 6 5 12.0869% of the shares and has an option to increase its stake to 19.4% within three years. By December 2013, Total owned in "NOVATEK" 17%.

At the end of May 2014 CEO and chairman Christophe de Margerie, Total Board of Directors came to the St. Petersburg International Economic Forum, in spite of the refusal of some Western officials and businessmen from attending the event because of the sanctions against Russia imposed after the escalation of the crisis in Ukraine. Faced with Timchenko, who was in the sanctions list of the United States and Canada, in the pavilion forum at the stand, "Novatek" de Margerie embraced him, called his friend and said that says "fromthis heart. "

In early July, the head of Total again took the side of their partners, warned the European Union on Russia's isolation.

"Can we in Europe live without Russian gas? The answer - no ", - said de Margerie.

His interest in Russian gas Total could confirm just at the moment when the "Novatek" has fallen rapidly due to imposed on the company and its Russian owners of sanctions, saying Forbes source close to both companies.

In Total had an option to increase its stake to 19.4%, which could fulfill until April, 2014.
The fact that Timchenko hit the US sanctions list, it became known on March 20 in the evening. The next day the quotations of depositary receipts "Novatek" on the London Stock Exchange dived to its lowest intraday value of the last two years - $ 94.83. The volume of trading on that day amounted to almost a record value in the history of the listing of securities - 3,698,672 receipts, higher volume was achieved only November 1, 2012 (5,180,659 receipts). One ADR represents 10 ordinary shares "Novatek & raquo ;, and then the deal would have cost if Total was able to buy 3% of the Russian company at the lowest price receipts of $ 863.81 million.

The next blow to "Novatek" has been applied on 16 July while US companies have limited access to liquidity in the international market. Against this background, "Novatek" messages dropped in price by 8% on the Moscow Stock Exchange, 7.72% - in London. Package of 3% of the company shares on that day at the close of the London Stock Exchange was worth $ 984,220,000. At the Moscow stock exchange shares fell 5.52% on the day, buy 3% would cost $ 1 billion.

But the share of 19.9%, "Novatek" - 0.5% greater than the maximum digits that the option has been agreed.
Total sell their shares could direct one of "Novatek" shareholders, the source says Forbes. Another interviewee remarked that such shareholder may have himself Timchenko. According to the representative Timchenko, on July 23, 2014 the share of the businessman in the company is 23%, "the last 3-4 months of transactions in shares" Novatek "has not been and is not planned in the near future." In the prospectus for Eurobond (dated December, 2012, there is no actual data) indicated that Timchenko owns 23.49%. Share Michelsone is 24.76%.
"As of the end of 2013. Total share was 17%," - noted the official representative of a French company, refusing to comment further. The representative of "Novatek" declined to comment.