Russian Rosneftegaz to pay biannual divs, but only part to trickle down

Russian Rosneftegaz to pay biannual divs, but only part to trickle down
Rosneft holding company Rosneftegaz promises to pay govt its dividends in full / kremlin.ru
By bne IntelliNews June 18, 2018

Russia's state holding Rosneftegaz, that holds the government shares in oil major Rosneft, will switch to paying dividends twice a year, and will pay out at least 50% of its net profit in keeping with the Ministry of Finance’s orders, Vedomosti daily reported on June 18, citing three unnamed federal officials.

Rosneftegaz is controlled by Igor Sechin, who is also chairman of Rosneft and influential friend of President Vladimir Putin. The holding owns the state's shares in Russia' largest energy assets including Gazprom, Rosneft, and InterRAO, and is notorious for its lack of transparency. It has repeatedly defied the government and failed to pass on dividends to the state.

Rosneftegaz has been dubbed "Sechin's piggy bank" by Kremlin insiders and forcing it to pay dividends in full to the budget is a major victory for liberal fraction in the Kremlin, formally lead by the Finance Ministry in its fight to scrap dividends from country's largest state companies. Recent Transneft oil pipeline operator also complied with the demand to pay the 50% of IFRS revenues. 

However, reportedly Rosneftegaz will pay RUB33bn ($0.5bn) in dividends for 2017, which is still much less then it received in dividends on its 50% plus one stake in Rosneft, 10.97% stake in Gazprom, and 27.63% stake in InterRAO. 

Vedomosti estimated that in 2017 Rosneftegaz got RUB72.8bn in dividends from the three companies.  Analysts surveyed by the daily point out that bi-annual dividend is in line with the new dividend policy of Rosneft, which will also pay the dividends twice a year.

Rosneft has recently started to improve its image for investors and promised, among other things, to reduce its heavy debt load.

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