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RMG - Gazprom to guess again on oblgazes, Mar 7, 2013.

On March 15 Gazprom BoD will consider purchase from Rosneftegaz (RNG) of stakes in 72 JSCs listed in the government order N2016 from November 13, 2010. Most of these companies are regional gas distributors (oblgazes), and some of them are traded OTC on RTS Board.

Purchase prices are still unknown and will be determined on the basis of independent appraisal. Source cited by Interfax said the prices cannot be lower than purchase prices by RNG in 2008 (see table below).

However the goverment order says nothing about this requirement. What it really says is that the deal prices should not be lower than prices based on independent assessment.

If Gazprom decides consolidation of stakes on one legal entity then minorities in these companies may face a buyout offer. However one cannot rule out that stakes will be acquired by different subsidiaries of Gazprom.

We note that most valuations dated 2008 are much higher than current market prices, but there is also high possibility that they will be eventually revised (likely downwards).

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Rye, Man & Gor Securities

Copyright: Rye, Man & Gor Securities, All rights reserved.

For further information please contact: Rye, Man & Gor Securities,

Posledniy Pereulok 17, Moscow 107045, Russia

Tel: +7 495 258 62 62, Fax: +7 495 258 62 26

Websites: http://www.rmg.ru, e-mail: research@rmg.ru
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Publication:Russian Banks and Brokers Reports
Date:Mar 7, 2013
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