Bashneft IPO in Doubt After Share Restriction Notice

Plans by Russia's mid-sized oil producer Bashneft to list its shares in London this year look to be in doubt after its owner, Sistema conglomerate, said it received a notice about a restriction on share transactions, analysts said.

Bashneft has been planning an initial public offering since it was acquired by the oil-to-telecoms conglomerate Sistema holding in 2009. It was eying a listing of $1-2 billion worth of shares in London as early as September.

However, Sistema said this week it had received a notice from its registry OJSC REESTR about restrictions on transactions with Bashneft shares owned by Sistema. It added the restrictions were related to an investigation, which Sistema was not party to "and with which the company plans to fully cooperate".

"This will likely prevent Bashneft from the placement this year. At least, if the problem won't be solved until September, the window for the placement will be closed and it would be delayed till next year," said Andrei Polishchuk, an analyst at Raiffeisenbank.

Bashneft shares have been hit by news of the transaction restriction and fresh U.S. sanctions against some Russian companies over Moscow's role in the crisis in Ukraine. Bashneft itself is not subject to sanctions.

On Friday its shares fell by almost 6 percent, losing 20 percent comparing to this year's high reached in early July.

Sistema acquired Bashneft from local authorities in the Urals region of Bashkortostan. Local media have said the restrictions on share trading could be linked to the upcoming election of the regional head later this year.

Bashneft had also been reported to be an acquisition target of Russia's top oil producer Rosneft, which had denied it.

Sistema directly owns almost 72 percent of Bashneft's voting shares and an 86.7 percent total stake in the company.

A spokeswoman for Sistema declined comment beyond the company's statement. A spokesman for Bashneft said that current situation would not affect operational activity.

A banking source said the restriction had unnerved the market as no one understood the consequences of the decision.

Sistema, controlled by tycoon Vladimir Yevtushenkov, has said the restrictions do not limit its voting rights and the right to receive dividends.

"The restrictions on the transactions with Sistema's stake in Bashneft do not allow Sistema to conduct (a placement) of these shares, which we consider to be the key catalyst for Sistema this year," analysts at Otkritie brokerage said.

(Reporting by Vladimir Soldatkin,; Olga Popova, and Denis Pinchuk, editing by David Evans)