Large Buy Back Programme and Debt Reduction Announced

ROSN.MM – Rosneft Proposed $2bln Share Buy Back and $7.9bln Debt Reduction

Rosneft (ROSN.MM), Russia’s biggest oil producer is proposing a $2 billion share buyback as well as revealed plans to reduce its debt and liabilities by a minimum of 500 billion roubles ($7.9 billion) by the end of 2018. Shares are up  4.71% at time of writing on 02/05/2018.

The company said in a statement on Tuesday it would be reducing debt through sales of non-core assets, adding that the proposed share buyback programme would be carried out between 2018 and 2020 through what are called open market repurchases.

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The firms CEO Igor Sechin has the following to say “The Company continues to demonstrate robust financial results and proposed new initiatives will enable us to improve the focus on the business using core strengths that will result in the enhancement of shareholder returns,”

The proposals are part of the “Rosneft-2022” strategy and are focused on increasing profitability and returns on its existing assets, the oil company, in which BP has a 19.75 percent stake, said.

“We are strong believers in the fundamental value of Rosneft that is not fully appreciated by today’s volatile equity markets,” Sechin, a close ally of Russian President Vladimir Putin, added.

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The company has expanded rapidly having invested billions of dollars in overseas assets. Recently Moscow brokerage firm Aton labelled it as the “most leveraged oil company in Russia” with a net debt pile of around 2.2 trillion Roubles. The company also said that through an enhancement of its investment governance, project management practices and improving procurement would bring about a 20% decrease in capital expenditure guidance for 2018 closer to the 800 billion rouble mark putting the firm firmly on track to deliver a sustained cash flow impact within “Rosneft-2022”. Rosneft (ROSN.MM) also stated it would achieve a marked improvement in its working capital position of 200 billion roubles by the end of 2018 through “a number of initiatives in the trading business and the procurement function”.

It said it would carry out a review of its asset portfolio, focused on decreasing the share of “tail and non-core assets” and disposing of these should provide incremental net cash flow to shareholders, Rosneft said.

Rosneft has also filed legal proceedings in European courts against EU sanctions imposed in 2014 and 2015 over Moscow’s role in the Ukraine crisis.

Upward Momentum

Both technical indicators and moving averages according to suggest Rosneft shares have further upward momentum with Strong Buy as the suggestion.

Rosneft Technical Indicators and Moving Averages

Rosneft Technical Indicators and Moving Average


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