LUKOIL STATE-HELD BLOCK OF SHARES TO BE SOLD THIS YEAR - ECONOMIC DEVELOPMENT AND TRADE MINISTRY

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MOSCOW, August 18 (RIA Novosti) - The Russian Economic Development and Trade Ministry is sure that the state-held block of shares of the Lukoil major company is to be sold this year, Minister Andrei Sharonov told journalists on Wednesday.

Arrangements to sell the remaining state-owned block (7.59 percent) continue, he said. "The delay is because somebody thinks too low the normative price (set by the Federal Property Agency)," Sharonov said.

Earlier, Kirill Tomashchuk, acting head of the Russian Federal Property Fund (RFFI), said that it would declare the initial price for Lukoil in mid-August and hold an open auction in mid-September.

The deputy minister believes that now is the best time for selling the block.

The Federal Property Agency has set the normative price for 7.59 percent of Lukoil at 36,758 billion rubles (over 1 billion euros).

Vladimir Zelentsov, official spokesman for the RFFI, told RIA Novosti that the block will be sold not according to the normative but market price to be set by an independent appraiser.

He noted that the block's initial selling price will be lower than that government-set normative price. "The normative price fixed by the Federal Property Agency is the bottom price for shares," Zelentsov explained.

Since it is going to be an open auction, Lukoil will most probably be sold for a price much higher than the starting price, he added.

A source close to the government told RIA Novosti that the Lukoil state-held block of shares can be sold for not less than 1.8 billion dollars. "It is today's market price for the block," he said.

In late July Prime Minister Mikhail Fradkov signed the instruction to sell the Lukoil state-owned block (7.59 percent) at an open auction in a single lot (to one investor). In all, 64 million ordinary shares of the 0.025 rubles/share nominal cost will be sold.

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