SOCAR’s bond issue to be discussed in September
By Nigar Orujova
Azerbaijani state oil company SOCAR entering the securities market will have a strong, stimulating impact, chairman of the Azerbaijani State Securities Committee Rufat Aslanli said on May 31.
"The State oil company will actually be a "blue chip" on our stock exchange. In addition these securities will enjoy a very high social importance, as in future they will be purchased by the population and this will allow these security holders to receive some benefits in percentages from the activities of SOCAR," Aslanli said.
Referring to the process of issuing the SOCAR's bonds, Aslanli said the company had been ready to enter the IPO for some time, as well as to sell its securities in Stock Exchange.
"As it is known, for several years, the company has been listed on the London Stock Exchange. There was not an official appeal to the state committee on issuing corporate bonds, but we are carrying out very intensive consultations and informal discussions on the parameters of issuing the expected profitability and demand. The summer season comes and I think that we will return to this issue by September," said Aslanli.
SOCAR's head Rovnag Abdullayev announced that the company's bonds worth 500 million manats will be issued for placement on the securities market at the end of 2012. He said the bonds are planned to be issued for a period of five years.
The company plans to direct the funds received from the placement of the bonds to develop the Umid gas field and to the building of a new drilling rig.
SOCAR plans to carry out the issue of bonds on the inner market of the securities through joint venture SOCAR Umid, which was created with the purpose of development of the Umid gas field.
SOCAR has an 80 percent participation in the joint venture with 20 percent belonging to the Nobel Oil.
The building of a drilling rig, which will be carried out by the Caspian Drilling Company and State Oil Fund, will be financed through placement of "azbonds". Funds are laid aside in the budget of the State Oil Fund for financing the building of the drilling rig.
The Caspian Drilling Company is a service company, 93 percent of which belongs to SOCAR.
SOCAR placed Eurobonds in the amount of $1 billion for 10 years on the CEEMEA market (Central & Eastern Europe, Middle East and Africa) with 4.75 percent annual revenues in March. While its debut Eurobond issue worth $500 million and was accomplished in February 2012.
According to SOCAR, the revenues from the second SOCAR Eurobonds placement will partially cover fulfillment of the commitment on external borrowings.
Eurobonds placement in 2012 and 2013 showed SOCAR's top indicators on the international financial markets. About 41 percent of the Eurobonds were bought by European investors, while 32 percent bought by the UK, 25 percent by the U.S. and two percent by other investors.