German utility E.ON, the world’s largest privately owned utility, has sold its 3.5 per cent stake in the Russian gas giant Gazprom for £2.8 bn. The E.ON group, which is keen to raise money to lower its current huge debt burden as it considers plans to expand outside Europe, has sold 2.7 per cent to the Russian state bank VEB and 0.8 per cent on the stock market. This had an immediate stock market effect as E.ON shares extended its gains on the day and Gazprom stock rose to its highest since April.

Present burdens include a reduced demand for energy as a result of the economic downtun and the new tax on its nuclear generation fleet, a quid pro quo for the recently legislated extended lifetime for operating nuclear plants.

There has been a rumour that Gazprom could be broken up, but this purchase by the Russian state strongly implies that the government is not planning anything along thos lines.

According to the calculations of stock experts, E.ON has sold the stake at below market value–– approximately 165 roubles a share, compared with the previous days’ (30 November) market close of 174.2 roubles ($5.53).