Strategic Sectors Law Update – Commission Meets for Second Time in 2010

Today, PM Putin and the rest of the Governmental Commission on Foreign Investment in Strategic Sectors met for the second time this year, the first being in February. According to a press release from the government, the Commission considered six applications from foreign investors to purchase shares in Russian companies from one of 42 “strategic” sectors. Below are a list of the deals that were approved which, as always, I will update as information becomes available:
  • Tatneft Oil AG acquired additional shares in Bank Zenit. Tatneft AG is a “Swiss” corporation but, as the name suggests, Tatneft Oil is the oil company headquartered in Tatarstan (Russia’s sixth-largest oil company). Tatneft AG currently owns 24.56% of Zenit through Tatneft Oil, and owns 48.8% of the International Petrochemical Growth Fund, which in turn owns 41.92% of Zenit “through a series of structures.” Another large shareholder of Zenit is Russia’s richest man, Vladimir Lisin, with 14.42%.
  • KazakhGold became the parent company of Polyus Gold (Polyus Zoloto). Polyus Gold owns 50.1% of KazakhGold. At the end of last year, it was reported that there might be a deal whereby KazakhGold becomes the “parent” of Polyus in order to “increase the liquidty of shares in Polyus Zoloto.” The main owners of Polyus are Mikhail Prokhorov (29.9%) and Suleiman Kerimov (36.9%).
  • Gunvor acquires 30% in OOO “PetroResurs.” Yet another deal approved for Putin pal Gennady Timchenko. This time Timchenko’s “Dutch” Gunvor International B.V. purchased 30% of PetroResurs, which owns the license to the Lagansky block on the Caspian shelf. Ironically, Gunvor purchased the 30% stake from Swedish Lundin Petroleum, arguably making this a net loss in real FDI for Russia.
  • Sanofi-Aventis purchase of Bioton vostok factory in Orlovskaya Oblast. Well I’ll be damned! A real foreign investment! This might explain why Putin discussed Aventis’ investment during his prepared remarks as opposed to, say, his buddy Timchenko’s acquisition of PetroResurs. Sanofi-Aventis is a French pharmaceutical group and Europe’s largest manufacturer of medicines. The factory will make insulin pens which will be useful to Russia’s increasingly diabetic population. As a result of the deal, Sanofi-Aventis will own 74% of the factory. Any guesses as to whether this deal was negotiated between Putvedev and Sarkozy? It is the year of France in Russia, after all.   

As always, we dedicate a little space for the comments of Vladimir Vladimirovich:

    This entry was posted in Foreign direct investment, foreign investment, PM Putin, strategic industries. Bookmark the permalink.