Russian natural gas giant Gazprom will have its subsidiaries Gazprom Gerosgaz Holdings BV (Netherlands) and Rosingaz Limited (Cyprus) place 693mn shares of the company or 2.93% of the share capital on Moscow Exchange (Moex), the company said on July 25.

Currently the stake is valued at RUB147bn ($2.3bn). With the SPO Gazprom has cashed in on the recent rally of its shares. As reported by bne IntelliNews, capitalisation of Gazprom on Moex topped RUB6 trillion ($95bn) in July, reaching its highest since August 2008 and extending its lead as Russia’s most valuable company over rival state-owned Sberbank.

Upon the announcement the shares dived by 2.8%, but then recovered, putting the capitalisation of Gazprom at RUB5.33 trillion as of 15:30MSK.

Traders and analysts told Vedomosti daily that while the usual reaction would be a decline in the share price, the recovery indicates that the market expects the SPO to be absorbed by a limited number of investors and not have the stake spill over to the trading community. .

"Given that there was no official preparation for the placement of such size, these shares will be distributed among several buyers and will not create an overhang risk," BCS Global Market commented on July 25.  

Overall, Gazprom's subsidiaries own 6.64% shares in the mother company. Previously the head of the company, Alexei Miller, told the press that various market mechanisms of monetising the treasury stake were being considered.

Analysts surveyed by Vedomosti daily believe that the SPO is logical in current market conditions, with high valuation and calm on the sanctions front. The sale will help Gazprom finance its investment programme and maintain the recently increased dividend payout. Further sales of the treasury stake are not excluded.

BCS GM estimated that the $2.3bn in proceeds that the company will get from the placement will reduce its net debt by 6%. In addition, BCS analysts also believe the placement "may also create value for minorities with 3% upside risk" and create an extra $600mn of book profit on the shares purchased in 2009 at a price of roughly RUB163 per share. 

In June Gazprom’s shares soared after the management revised up the company's dividend strategy, bolstered by rumours of a reshuffle of incumbent Kremlin managers that did not materialise.

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