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The Moscow Arbitration Court ruled to return to the state another stake in six Bashkir fuel and energy enterprises and upheld on Tuesday an appeal of Interregional tax Inspectorate of the Federal Tax Service for the Largest Taxpayers against Inzer-Invest, which was the third out of the four similar claims of the tax inspectorate. Thus, the state is about to gain control over the Bashkir assets which should positively impact their investment appeal in the mid-term.
Interfax reported that on Thursday, July 31, the Moscow Arbitration Court upheld the appeal of the Federal tax Service and ruled to return to the state 13-16% stakes in Bashkir fuel and energy enterprises from Inzer-Invest. The court urged Tsentralnaya Registratura to transfer these shares to the Federal Property Management Agency (Rosimushchestvo). The court issued similar rulings on shares owned by Yuryuzan-Invest and Ural-Invest on June 29 and July 2. Taking into account two previous court rulings, the state currently controls in the range of 39-48% in Bashkir fuel and energy enterprises. The last appeal against Agidel-Invest is in court now and the hearings are scheduled for August 15.
We view statalization as upbeat for Bashkir enterprises. Should this scenario materialize, the situation could unfold under two different scenarios: the state could sell these assets to one of the state-run petrochemical holdings or establish a large petrochemical holding coupled with Sistema. In any case, this is a positive for Bashkir companies, since it will improve corporate governance, information transparency, capacity utilization will rise and risks will decrease significantly , in particular, tax claims which will boost their cash flows and investment appeal.
Thus, the ruling of the Moscow Arbitration Court should positively impact the stock valuations of Bashkir enterprises in the mid term.
Our target price of the Ufa refinery (RTS: unpz) is $2.75 per share, the Novoufimsky refinery (RTS: nunz) $2.39 per share and Ufaneftekhim (RTS: UFNC) $5.54 per share. We assign them a Buy recommendation.
Michael Frolov
Other comments of the day
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Novoil
Capitalization: $738 734 101,86
Common shares:
Price: $0,91
Delta week: 0,00%
Delta month: 13,8%
Delta year: -36,0%
Preferred shares:
Price: $0,20
Delta week: 14,7%
Delta month: 62,5%
Delta year: -73,9%
Ufaneftekhim
Capitalization: $284 039 394,80
Common shares:
Price: $0,95
Delta week: -5,5%
Delta month: -43,3%
Delta year: -71,6%
Preferred shares:
Price: $0,35
Delta week: 2,2%
Delta month: 39,0%
Delta year: -79,6%
Ufa oil refinery
Capitalization: $263 093 365,35
Common shares:
Price: $0,45
Delta week: -7,2%
Delta month: -58,1%
Delta year: -75,7%
Preferred shares:
Price: $0,24
Delta week: 0,00%
Delta month: -29,1%
Delta year: -75,5%
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0.553
1.6
