Russia Cancels LUKoil Share Sale

Russia canceled a $714 million sale of shares in OAO Lukoil, the country's largest oil producer, because of slumping markets.

Lukoil shares fell by 38 cents to $14.22 yesterday on the Russian Trading System and have declined 22 percent since May 27th. Stock sales in Europe have dropped by almost a fifth to about $50 billion this year.

The current market price “is not attractive,” the Russian Federal Property Fund said in a statement announcing its decision to put off the sale until a later date. The time for selling “Russian companies at any price is over.”

Cancellation of the Lukoil sale is a setback to the government's effort to offset falling revenue as economic growth slows and the country faces $17 billion in foreign debt payments next year. The decision also may stall offerings by other Russian oil companies, including Yukos and Tyumen, which have said they are considering share sales in the near future.

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