According to the information provided by sources connected to the shareholders of Sibur Holding, the company has intentions to issue extra shares of stock totaling in value up to 10 bln. roubles. There exists a high likelihood that the new stock may be purchased entirely by Gazprombank, which currently owns almost 70 percent of Sibur.  

On the basis of an estimate performed in 2008, the value of Sibur is around 104 bln. roubles. While that figure appeared to be grossly understating the actual value of the company prior to the economic collapse, the number adequately represents the current situation of the company.

If Gazprombank decides to proceed with the transaction, its share in Sibur will total 72.6 percent. The second shareholder Gazfond will lose the ability to block company action, as its percentage of ownership would decrease to 22.8 percent. Shares allocated to the stock option program would drop to only 4.6 percent.

Representatives of Gazfond commented that the company would not favor the issuance of additional shares. At the same time, a spokesman for Sibur indicated that the company is currently looking at different ways for raising capital. Sources connected to Gazprombank mentioned that the company entertains hope that a decision to issue the shares will be made.

The scale of Sibur’s investment program to be implemented in 2009 has not been announced yet. There is also no full information about the results of the company’s investment plan for 2008. Gazprombank estimated the amount of capital to be raised in 2009 at 30 bln. roubles. Significant projects that the company launched, including the creation of a polypropylene line in Tobolsk and a polyvinylchloride production facility in Nizhny Novgorod, call for obtaining more than USD 2.2 bln. from Vnesheconombank. In addition, Sibur also has plans to get USD 1.4 bln. in loans from export agencies.

Industry analysts believe that issuing additional shares constitutes the only viable option for Sibur to raise any funds for supporting the company. As a result of Russia’s economic difficulties, prices on petrochemical products have dropped by more than 40 percent.