"The signing of this agreement allows us to restore control over an important gas-extracting company, which had previously belonged to Gazprom," said Gazprom deputy CEO Alexander Ananenkov in a statement Friday.
United Financial Group has valued the 51 percent stake at between $800 million and $900 million. But Gazprom will not pay anything under the deal because the asset it once owned is simply being returned, Gazprom spokesman Sergei Kupriyanov said.
The deal ends a bruising legal battle that culminated in April this year when Gazprom won a court ruling to strip Northgas of its license to develop the north Siberian Severo-Urengoi field, which holds estimated reserves of 330 billion cubic meters.
State-controlled Gazprom has become increasingly powerful as President Vladimir Putin has moved to secure greater state control over the energy sector. Since Putin appointed Alexei Miller as Gazprom CEO in 2001, the company has been attempting to regain assets sold off by previous management.
Northgas was established in 1993 as a venture 51 percent owned by Gazprom subsidiary Urengoigazprom, with the rest held by U.S. engineering company Bechtel and British-based Farco Group, which was acting in the interest of Northgas' current president, Farkhad Akhmedov. By 1999 Farco had bought out Bechtel and the Gazprom stake was reduced to 0.5 percent after a court ruled that Urengoigazprom had not paid for participation in an additional share emission.
Akhmedov has said his group invested hundreds of millions of dollars in developing the field, while Gazprom failed to finance its share in the field.
The April court ruling to revoke Northgas' license appears to have been the final blow for Akhmedov, leaving him with little choice but to hand back the stake to Gazprom.
"It's much better to have 49 percent of a company that's functioning successfully than have 100 percent of nothing," said Dmitry Kryukov, managing director of Renaissance Capital's investment banking division, which acted as exclusive financial adviser to Gazprom over the deal.
Under the deal, which is being conducted according to English law, Akhmedov will retain some say over management and board decisions, Kryukov said. Akhmedov's group will have two seats on the management board and board of directors respectively, while Gazprom will have three seats on each, he said. The transaction could take another two to three months pending approval from the Federal Anti-Monopoly Service, he said.
Northgas could not be reached for comment on Monday, a public holiday.
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