The Moscow Times reported that Sistema, billionaire Mr Vladimir Yevtushenkov's holding company agreed to pay USD 2.5 billion for control of Bashkortostan's main oil producer, as well as three refineries, a petrochemicals plant and an oil product trader in the Russian region.

Sistema will raise its stake in producer Bashneft to 77% from 25% and will also take majority interests in the Ufaneftekhim, Ufimsky NPZ and Novoil refineries, the company said in a statement. Sistema will increase its holdings in trader Bashkirnefteprodukt and the Ufaorgsintez petrochemicals plant to 73% each.

Ms Yulia Belous spokeswoman said the company agreed to take a USD 2 billion, seven year loan from VTB Group, backed by shares in the acquired companies and a 17% stake in Mobile TeleSystems. Sistema is in talks with local and foreign banks to borrow another USD 1 billion.

Mr Leonid Melamed CEO said Bashneft accounts for 3% of Russian oil output. The three refiners make up 10% of the country's oil refining, while Ufaorgsintez is the nation's largest producer of synthetic ethyl spirit. Bashkirnefteprodukt supplies oil products in the Volga region. The companies will require funding of about USD 1 billion over five years.

Sistema will pay USD 2 billion when the transaction is completed and another USD 500 million on a deferred basis after 14 months, the statement said. Sistema's total debt will increase to USD 12.6 billion after the acquisitions from USD 9.4 billion now, the company's presentation shows. Sistema will offer to buy out minority shareholders in the Bashkir energy companies. The holding will raise its stakes in the Ufaneftekhim, Ufimsky and Novoil refineries to 66% 78% and 87% respectively.

(Sourced from The Moscow Times)