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N. Tokarev: Transneft, JSC, is planning to increase dividend amounts based on the performance in 2012

Date of publication: 8 April 2013

Transneft, JSC, is planning to increase dividend amounts based on the performance in 2012, President of Transneft, JSC N. Tokarev informed the journalists in Hannover, which is hosting the International Industrial Fair - Hannover Messe-2013. “We took measures to make dividends on the preferred shares not lower in the amount than the state voting shares. We hope that the balance over the last year will be reached and the amount payable in dividends on the preferred and voting shares will be the same not to infringe upon the interests of the state. The payable amounts will be slightly larger, about 37% (of the net profit),” the President of Transneft, JSC said. In his answer to the question about the size of the dividends on the preferred shares he said: “10% of the profit of Transneft, JSC – the parent company – as it was previously in accordance with the Articles of Association.” As he noted, the Board of Directors of the Company will discuss the dividend payments in May.

N. Tokarev also informed that Transneft, JSC, is planning to embark on construction in October, while implementing the oil pipeline construction project in the Yurubcheno - Tokhoma area. “The design and survey work will be completed by summer, the design documentation will be prepared, and we expect that in October we will be able to start construction and assembly works in all the sections . By that time, we will know who our general contractors are going to be; during June – July they will complete mobilization, and by 2016 we expect that all our works will be completed,” he said.

According to the President of the Company, Transneft, JSC, has received directives for selling of the stake in the Continental Hockey League, LLC (KHL). “We acquired the stake for 100 mln rubles; I did not follow their capitalization; so our intention is not to lose at least what we paid for it,” he said. As N. Tokarev informed, the applications were sent to Transneft, JSC, by the Lev team from Prague, by Rosneft and by the League. The value of the stake of Transneft in KHL will be appraised in the near future. “Once we know how much it costs on today’s market, we will send formal offers to prospective interested entities,” N. Tokarev said.

The President of the Company also informed that Transneft, JSC, which controls Novorossiysk Commercial Sea Port, JSC in the joint venture with the Summa Group, is not interested in purchasing of the state’s holding in NCSP; however, it may think over and buy out the stake of its partner, if the partner is ready to sell it. “By and large, we don’t see it as pressing obligation, as today the state owns a little more than 50% in NCSP. I think that the objective that we set to ourselves at the time of the purchasing has been achieved successfully. The state had its control back, and today in the Board of Directors four out of seven members represent interests of the state: the Federal Agency for State Property Management of the Russian Federation, the Ministry of Transport of the Russian Federation and Transneft, JSC. Therefore, for reason of economy, I don’t see spending money as sensible,” the President of Transneft, JSC said. He pointed out that at the moment about ten strategic investors intended to buy the state’s holding. As far as I know, they are the NefteGazIndustria Group of Vladimir Kogan, the Delo Group of Sergey Sishkarev, the Arabian Foundation from the United Arab Emirates; I may not remember all of them. Besides, there is also Summa Capital Group,” Tokarev said. In his answer to the question about his opinion of the Summa’s claim for the state’s holding, President of Transneft, JSC said: “We do not want the situation to be imbalanced and to have the sole and the only shareholder. Naturally, the private shareholder will not always have the interests that are similar to the interests of the state, and the resulting conflict will have to be solved in one way or another.” He also informed that the decision on privatization must be made in 2013. According to the President of Transneft JSC, the state’s holding appraisal values are different. “The appraisal values are different; however, they are within the 300–400 mln dollar range,” N. Tokarev said. When he was asked whether Transneft would be interested in buying out Summa’s stake in NCSP, N. Tokarev answered that the subject had not been discussed in detail. “However, if Summa decides that its stake can be listed for sale, we would look into this opportunity,” he said.

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