Russian oil IPO

Stephen Beard Jun 13, 2006


MARK AUSTIN THOMAS: The Russian government has revealed some details of one of the biggest IPOs in history. The Kremlin is preparing to float shares in the oil giant Rosneft on the London Stock Exchange. From the British capital, Stephen Beard reports the listing gives new meaning to the term “hot IPO.”

STEPHEN BEARD: The Kremlin says it will sell off about 10 percent of the state-owned company Rosneft, raising between $10 and $13 billion. The details are still sketchy. The listing will be some time this summer.

But one thing is certain, says Nick Redman of the Economist Intelligence Unit. It will trigger a maelstrom of lawsuits. Most of Rosneft’s assets were bought at a knockdown price in a forced sale from the Yukos company.

NICK REDMAN: A whole core of Western investors in Yukos have just been waiting for this listing and the moment that Rosneft has a presence in London, the legal suits will almost certainly start hitting the mat.

Potential investors in Rosneft will be torn between the perils of buying stolen property and the lure of big profits. As a state-owned company, Rosneft is well placed to win Russia’s most lucrative oil exploration licenses.

In London, this is Stephen Beard for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.