Novatek Approved a Number of Transactions

Shareholders in Russia's largest independent gas producer Novatek have approved a number of transactions, including supply deals to Russian power generator Mosenergo and petrochemicals company Sibur, and a eurobond issue worth $1.5 billion, at an extraordinary general meeting, Novatek said Friday. 

In December, Novatek said it had agreed on a three-year deal to supply Mosenergo with up to 27 billion cubic meters of gas. The transaction was valued at no more than Rb121 billion ($3.9 billion), or Rb155.5 billion including VAT. The price for gas supplied under the deal will be set in line with orders from Russia's Federal Tariff Service, which sets the minimum wholesale price of gas for industrial consumers in the region, Mosenergo said when the deal was announced. 

Mosenergo is a subsidiary of Russian state-owned gas giant Gazprom. 

Novatek shareholders also agreed to supply deals over 2014-2033 with Russian petrochemical group Sibur during the shareholder meeting, held on Wednesday. 

The deals include plans to transport, process and supply all of the light hydrocarbons produced during gas stabilization at Novatek's Purovsky plant to Sibur's Tobolsk Petrochemical complex. The deals envisage transportation and processing of no more than 24 million mt of light hydrocarbons, worth up to Rb36 billion and supply of no more than 36 million mt of light hydrocarbons at a value of up to Rb410 billion, according to details of the meeting agenda. Novatek also obtained shareholder approval on a deal worth up to Rb100 billion to supply up to 8 million mt of LPG to Sibur between 2014 and 2033. 

Novatek shareholders also approved plans to issue eurobonds worth up to $1.5 billion, or the equivalent in other currencies, at up to 9%/annum. The bonds, which will have a maturity of up to 10 years, are to be issued by Novatek Finance.