And in a further push to a privatization program which has focused so far this year on oil, President Boris Yeltsin ordered six relatively small oil companies to be sold, removing them from lists of strategic firms and others designated to remain state property.
A commercial tender for 35.73 million LUKOIL shares will be held June 20, the property fund said in its Reforma bulletin.
A LUKOIL spokesman said the shares represented a stake currently held in trust by LUKOIL and Bank Imperial, one of Russia's biggest banks, under the government's controversial shares-for-loans program.
LUKOIL, in which U.S. oil group Atlantic Richfield owns 8 percent, and Imperial took over the stake in December 1995 in return for a $35 million loan to the government.
LUKOIL spokesman Dmitry Dolgov said the starting price for the stake is 250 billion rubles ($43 million).
The government will repay the loan out of the proceeds, and split the excess with LUKOIL, which in terms of crude oil reserves is one of the world's biggest oil companies. LUKOIL will get 30 percent of the difference and the property fund 70 percent, he said.
Shares in LUKOIL, whose openness has made it one of the most popular Russian companies with foreign investors, were trading at around $15 each Monday, putting the value of the stake at about $535 million.
But recent auctions of stakes in other oil groups such as Sibneft, Surgutneftegaz and SIDANKO, mortgaged under the shares-for-loans program, have produced winning bids barely above the starting price and little more than the original loans under the scheme -- and far below their likely market value.
The shares-for-loans program in 1995 raised urgently needed funds for the cash-strapped government without dumping millions of shares in privatized companies on the market.
But the scheme was much criticized, as the rules were changed repeatedly, and many tenders were won by investors close to the banks organizing the auctions for the government, with bids barely above the reserve price.
Yeltsin's new decree allows the sale of stakes in oil minors Tyumenskaya Neftyanaya Kompaniya, whose main operating unit is Nizhnevartovskneftegaz, and Vostochnaya Neftyanaya Kompaniya, whose main producer is Tomskneft, and regional oil group KomiTEK, which controls the Komineft oil company.
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