News From Bloomberg. Prosperity Urges TNK-BP Investors to Fight Rosneft’s Cash Pull

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Prosperity Urges TNK-BP Investors to Fight Rosneft’s Cash Pull

The largest foreign fund manager focused in Russia said the country’s reputation is at risk after OAO Rosneft’s $55 billion takeover of TNK-BP landed the state- run oil producer in a fight with minority shareholders.

Prosperity Capital Management is looking to team up with fellow investors in the TNK’s traded unit, OAO TNK-BP Holding (TNBP), and seek redress after Rosneft’s plan to borrow money from the company rather than paying dividends sent the shares to a record low this week. Rosneft said its move was standard practice.

The biggest takeover in Russian history strengthens the state’s hold over oil and gas production, the source of half its budget revenue. The government is trying to turn Moscow into a global financial hub to attract investors and shift the economy away from resource dependence.

“The whole country’s reputation will suffer if a big company like Rosneft can behave like this, ” Prosperity CEO Mattias Westman, who helps oversee about $4 billion in Russian assets, said by phone from Texas. “We will be talking to other investors and communicating directly with Rosneft on this. ”

TNK-BP Holding fell the most since trading began on the Micex, retreating 26 percent to a record low on March 26. The biggest previous one-day decline came in October when Igor Sechin, Rosneft’s chief executive officer, warned that the company may end TNK-BP’s dividend policy and had no plans to buy them out.

A buyout based on the average price during the last six months would require about $700 million, according to Luis Saenz, head of equity sales at BCS Financial Group in London.

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