State pays second installment for 10.7% of Gazprom shares

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MOSCOW, October 25 (RIA Novosti) - Rosneftegaz, the company established to acquire the 10.7% of shares in Gazprom that the state needs to increase its share in the natural gas giant to the controlling block, has paid the second installment for the stock, a government source said Tuesday.

The second installment was to be paid before October 25 and the remainder is to be transferred to the gas concern by December 25, according to a government source. The stake costs 203.5 billion rubles ($7.11 billion).

Gazprom said it had received the second installment of about 20.9 billion rubles ($730.14 million).

The shares were acquired from Gazprombank, Gazprominvestholding, Gazfond, and Gaprom Finance B.V., the gas monopoly's subsidiaries.

The first installment was made in July by borrowing 16.2 billion rubles ($565.9 million) from the state-owned Rosneft oil company.

In early September, Rosneft and Rosneftegaz reached an agreement with a consortium of foreign banks, ABN Amro Bank, Dresdner Kleinwort Wasserstein, JP Morgan and Morgan Stanley, on allocating $7.5 billion in a syndicated loan.

Rosneft said the loan would be allocated in full before the end of 2005.

The deal to increase the state share in Gazprom is necessary to carry out the liberalization of the gas concern's shares and lift restrictions on their trading at foreign exchanges and sales to foreign residents.

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