Rosneft will spend up to $ 2 billion on the repurchase of 3.2% of its shares

As a result of this operation, the share of freely traded shares and depositary receipts of the oil company will decrease to 7.5%.
 On Monday, the board of directors of Rosneft approved a program of buyback, the company said. The program will operate until December 31, 2020, Rosneft expects to spend a maximum of $ 2 billion and buy out a maximum of 340 million shares - 3.2%, or one-third of the free float, the company said.

The agent bank, which will buy shares in favor of Rosneft, has not yet been determined, but it will only be done on the open market. Whether the company will buy out the acquired shares or use it for other purposes is not yet known - it will accumulate them in a special account, and the decision will be taken after the completion of the repurchase program.

Based on the average price on the Moscow stock exchange over the past three months and the average dollar rate over the same period, 3.2% of Rosneft shares are worth $ 2.14 billion, or 1.34 trillion rubles; for $ 2 billion, you can buy 2.99% of Rosneft, or 28.8% of the shares in free float. The selected bank will buy back shares when the price is low, warns the source close to one of the shareholders of Rosneft.

Investors like the news - Rosneft went up 2.7% at the opening of trading compared to the close of trading on Friday, its capitalization reached 4.47 trillion rubles. Later the paper became cheaper, the growth to closing on Friday at 12.00 Moscow time was only 1.58%, and the capitalization - 4.42 trillion rubles.

This is the first buy-back of shares in the history of Rosneft. To finance the repurchase program, Rosneft intends, as it claimed, due to organic free cash flow and the sale of non-core assets. What assets Rosneft intends to part with, she did not disclose.

Liquidity in the papers of Rosneft is so small, Vedomosti's interlocutor in a large investment bank thinks, it can decrease even more, and this can affect the quality and quantity of investors.

If the repurchase program is completed as planned, then only 7.5% of Rosneft shares and depository receipts will be traded on the London and Moscow stock exchanges, Aton analyst Alexander Kornilov said. If the redeemed shares are repaid, then 7.8% of the company's shares will remain in free circulation. This could lead to a decrease in the weight of the issuer in the MSCI Russia index and revision of the listing level, which could affect the quantity and quality of investors, Kornilov agrees with the previous expert.