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21.09.2012 13:58
Gazprom Ponders over European Branch Restructuring
From a political standpoint, siting the holding in Switzerland might seem preferable, since Britain and Luxemburg are EU members, which creates additional risks in the event the European Commission does checks

  • © Gazprom

Russian gas giant Gazprom has determined how it needs to restructure its assets in Europe in the fields of trading and logistics in order to meet the requirements of the European Union's 3rd Energy Package and weaken the influence of the company's deputy company chief and general director of LLC Gazprom Export, Alexander Medvedev, by transferring many of the assets from the export subsidiary to the parent company.
A source familiar with discussions of the deal's structure told Interfax that at first the plan was to move the companies Gazprom Germania GmbH and Gazprom Marketing & Trading, Ltd. to the level of direct OJSC Gazprom ownership. However, the downside to this is tax-paying on dividend flow at the German level, which means additional tax costs when Gazprom Germania dividends are being distributed.
To minimize the tax burden another scheme was suggested: creating two parent holding companies - GMT Holding for the consolidation and management of assets in the field of gas sales abroad, and Gazprom Storages & Transport for the consolidation and management of infrastructural assets in the field of transporting gas and storing it underground. In the latter would be Gazprom Germania, including existing underground storage facilities, which would make it possible to maintain at Gazprom Germania competence in the evaluation and realization of infrastructure projects and ensure tax efficiency. This is also driven by legal restrictions pertaining to certain German joint companies (partnerships). After those restrictions are removed, it will be possible to return to the matter of reorganizing the holding Gazprom Storages & Transport for the divestment, if need be, of ownership chains of interim links.
Gazprom Export will continue to export gas under long-term contracts. The company will also take on assets associated with deliveries on the basis of commission agreements - particularly from Central Asia (Gazprom Schweiz AG) and other assets whose trade operations will be halted in the near future (stakes in Gasum (Finland) and Yugorogaz (Serbia)).
Gazprom is already prepared for the simultaneous tax consequences of asset regrouping, consequences that could run to about EUR 600 million, the company calculates. The main tax burden falls on Gazprom Export in the form of a tax on profit with GMT Holding going to Gazprom.
Where GMT Holding and Gazprom Storages & Transport are to be registered has yet to be decided. Gazprom specialists will choose between Britain, Switzerland, and Luxembourg, and each jurisdiction has its pluses and minuses.
From a political standpoint, siting the holding in Switzerland might seem preferable, "since Britain and Luxemburg are EU members, which creates additional risks in the event the European Commission does checks," the source told Interfax.

TAGS: Gazprom | Europe | liberalization | EU | business | restructuring | politics | natural gas 

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