MOSCOW, October 23 (RIA Novosti) - The board of state-controlled pipeline monopoly Transneft [RTS: TRNF] approved on Tuesday an additional share issue to merge with oil transport company Transnefteproduct.
"The board confirmed the volume of the additional share issue for consolidation, and approved the companies' valuation," Russian Industry and Energy Minister Viktor Khristenko said.
He said Transnefteproduct's worth was put at 52.4-52.5 billion rubles ($2.2 billion) and that the board of directors had approved a merger scheme through an additional issue of Transneft shares to be placed through closed subscription.
The minister said the merger would be completed before the end of the current year.
It was reported earlier that the consolidation would involve the transfer of Transnefteproduct's 100% stake to Transneft's authorized (statutory) capital.
The government controls 75% of Transneft stock, or 100% of its voting shares. Transneft's charter capital is 6.22 million rubles ($216,000). Preferred shares are held by private owners.
Transnefteproduct is a 100% state-owned company with authorized capital of 1.26 billion rubles ($46.78 million).
