Money Focus: Sistema goes into the oil business

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MOSCOW, August 12 (RIA Novosti commentator Peter Lavelle). Business daily Vedomosti reports that AFK Sistema is preparing to buy or has already bought stakes in businesses owned by Ural Rakhimov, son of Bashkortostan President Murat Rakhimov, which include interests in crude oil production, refining and petrochemical businesses in the republic for $503 million.

Sistema has bought a 19.9% stake in each of Novoil, Ufimsky, Ufaneftekhim, Bashneft and Ufaorgsintez; 18.57% of Bashnefteproduct; and 10.08% of Bashkirenergo. Vedomosti also reports that Sistema may increase its stakes in some of these companies to constitute blocking minorities in the near future.

Why is Sistema, a major player in the Russian telecoms market and has wide-ranging interests in the Moscow property sector, as well as other businesses, now interested in owning oil and energy assets? The consensus among analysts is Sistema plans to be only a financial investor with the aim to re-sell these assets later at a handsome premium.

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