OREANDA-NEWS. March 10, 2010. The Volga Resources fund, controlled by Russian businessman Gennady Timchenko has increased its total investment in NOVATEK from 18.2% to 20.77%, having bought an additional 2.57% stake on the market. This moves Mr. Timchenko ahead of Gazprom (19.39%) as the company’s largest minority shareholder, reported the press-centre of OTKRITIE Financial Corporation.

View: From our standpoint, Mr. Timchenko’s involvement in NOVATEK has been positive for the company. In May 2009 he sold a 51% stake in Yamal LNG to NOVATEK. Yamal LNG controls a license on the South Tambey field (recoverable gas reserves of 1.3tcm), which we believe will serve as NOVATEK’s base of profitable growth after 2015. In addition, we believe the participation of Mr. Timchenko helped NOVATEK win contracts with large gas consumers last year (INTER RAO, OGK-1). Reportedly, he applied for permission to increase his cumulative stake in the company to 23.49% by the end of March 2010, which suggests that he may be interested in acquiring additional NOVATEK shares from the secondary market.  

Recommendation: We maintain our positive view on NOVATEK and our BUY rating.