OREANDA-NEWS. June 19, 2007. Interest on Transneft’s shares will rise substantially in two years, stated president of Transneft Dr. Simon Vainshtock to reporters on the conference “Russia: Investing in prosperity” organized by Renaissance Capital, reported the press-centre of Transneft.

Company’s CEO said that in the process of merger with Transnefteproduct, which should be closed by September 14, according to the time schedule approved by Rosimuschestvo the interests of minority shareholders will be prejudiced. He had underlined that shareholders will be subject to receive the same 10% of net profit of the merged Company.

S. Vainshtock had pointed out that the Company is undertaking unprecedented investment projects: ESPO - $11,5 billion; will shortly start off the construction of the BPS-II - $2,5 billion and the Burgas – Alexandrupolis up to $ 2 billion. He stressed that “Transneft attracts financing for all of these projects itself having no tax or any other indulgence from the State” and yet pointed out that after accomplishment of these projects the size of the dividends will grow.

Trasneft has a plan to issue $ 2 billion Eurobonds and just expecting interest to go down said Simon Vainshtock to reporters.

We had done a road show but the interest had raised. We are awaiting now. We wanted to issue at 6% but Libor had soared. Whenever it goes back to the agreed benchmark we would like to issue about $ 2 billion – he said.

The underwriters are Goldman Sachs, UBS and Citi. The borrowing was planed in the framework of the 18-months $8 billion borrowing program for construction of Eastern Siberia – Pacific Ocean (ESPO) pipeline system. Pursuant to the program $3 billion will be attracted through loans and $5 billion through Eurobonds.

At the end of February as part of the program Transneft had issued the 7 years Eurobonds for $1,3 billion with record breaking low yield of 5,67% per annum. The issue underwriters were Credit Suisse and Goldman Sach.