Russian state fund proposes Transneft share conversion

Reuters, 18.07.2017

MOSCOW, July 18 (Reuters) - Russian oil pipeline monopoly Transneft would convert its preferred stock into ordinary shares under a proposal by state-backed Russian Direct Investment Fund (RDIF) to help the company to maximise investment potential.

RDIF Chief Executive Kirill Dmitriev, nominated to the board of state-controlled Transneft last week, spoke of the proposal in an interview with the Interfax news agency on Tuesday.

"We expect continued growth in (Transneft) dividend payouts in the next few years," Dmitriev told Interfax, adding that the potential share conversion would help the company to tap "new world markets, including Asian ones".

The conversion plan was confirmed in an RDIF statement.

"The RDIF considers it expedient to consider the issue of converting Transneft preferred shares into ordinary ones," RDIF said. "This will allow us to significantly raise shareholder value and share liquidity."

Sovereign wealth funds from the Middle East have bought into Transneft along with the RDIF, Dmitriev told Interfax without elaborating.

He said that the nominal value of Transneft shares could be split 100 to 1 to make the company more attractive for small investors. At 0730 GMT on Tuesday, Transneft was trading at 179,600 roubles ($3,025.07) per share. ($1 = 59.3706 roubles).