May 23, 2018 / 7:50 PM / a month ago

Sanctions-hit Vekselberg revives talks with Gazprom on power assets merger: sources

MOSCOW (Reuters) - Russian oligarch Viktor Vekselberg, who has been placed under U.S. sanctions, has resumed talks about merging his power assets with Gazprom (GAZP.MM), three sources familiar with the talks told Reuters on Wednesday.

Chairman of the Board of Directors of Renova Group, Viktor Vekselberg attends a session during the Week of Russian Business, held by the Russian Union of Industrialists and Entrepreneurs (RSPP), in Moscow, Russia February 7, 2018. REUTERS/Sergei Karpukhin

Vekselberg’s Renova Group has restarted discussions about merging its debt-burdened subsidiary T Plus with Gazprom Energoholding, the power unit of gas giant Gazprom, the sources said.

The initial talks began in 2011 and lasted for around a year but collapsed after the two sides failed to reach a deal on the conditions of the merger and because of opposition from Russia’s anti-monopoly regulator.

One of the sources said the new negotiations had been going on for around two weeks, but an agreement was far from being reached. The source said Renova was discussing obtaining a stake in Gazprom Energoholding, which would be small and not big enough to allow it to influence decision making at the Gazprom unit.

A fourth source said Renova had made an offer to Gazprom to buy out T Plus, but Gazprom was not “greatly interested in the deal”.

One of the sources also said Vekselberg had reluctantly initiated the talks as “sanctions bite”.

Renova and Gazprom declined to comment.

Vekselberg was placed under sanctions in a U.S. crackdown on President Vladimir Putin’s inner circle as retaliation for alleged Russian interference in the 2016 U.S. election.

The firms in which Vekselberg holds stakes have experienced varying fallouts since Washington announced impending Russian sanctions.

Kommersant business daily reported earlier this month that Renova was ready to resume talks with Gazprom as a way of protecting it from the sanctions.

T Plus owns power stations with around 16 gigawatts in combined capacity, or around 6 percent of Russia’s total. It has 134 billion roubles ($2.2 billion) in debt, according to its officials.

Writing by Vladimir Soldatkin; Editing by Susan Fenton

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