Deal on Eurasia Drilling to be delayed for a long time
FAS has found a way to at least delay the process of coordination of a deal on acquisition of a share in Eurasia Drilling by the US company Schlumberger: the Service considered that the purchase must be approved at the level above - by the Government Commission on Foreign Investment. Moreover, according to the Kommersant’s information, the FAS’ head Igor Artemyev is going to discuss with Vladimir Putin the deal that doesn’t suit one of the major players on the oil and gas market. However, lawyers find very dubious the justification that the deal should be submitted to the Commission, and note that there is no practice of appeal of its decisions.
The transaction on acquisition of a package of Eurasia Drilling Company (EDC) by American Schlumberger "is very likely" to require agreement not only with FAS, but also with the Government Commission on Foreign Investment, head of the Foreign Investment Control Department of FAS Armen Khanyan said to the Interfax yesterday. He added that "the expediency of submission of the application (of Schlumberger) is not in doubt". EDC declined to comment yesterday. Schlumberger stated to the Kommersant that "it is waiting for an official request from FAS".
Deputy Head of FAS Andrei Tsyganov stated yesterday that the Service waited for additional transaction documents. According to the structure of the deal, which was announced in January, EDC was to buy back its shares from minority shareholders through a loan in the amount of $991 million from Schlumberger and to make delisting of the shares on the London Stock Exchange. Schlumberger was to acquire 45.65% stake in EDC, and under the agreement it could increase its share to 100% for three years. The transaction value is $1.7 billion. The largest shareholders of EDC are CEO Alexander Japaridze (30.2%) and Alexander Putilov (22.4%), free float makes up 30.67%. But, according to the Kommersant’s information, one of the EDC’s beneficiaries is the first executive vice president of Lukoil Ravil Maganov.
