PRESS: Russia’s VTB provides 10 bln euro for Rosneft sale

MOSCOW, Jan 17 (PRIME) -- Russia’s second largest bank VTB participated in privatization of 19.5% in oil major Rosneft through provision of a 692 billion ruble, or a 10.2 billion euro loan to QHG Shares Limited – a consortium of the Qatar Investment Authority (QIA) and Swiss oil trader Glencore – on December 15, 2016, Vedomosti business daily reported on Tuesday.

Singapore-based QHG Shares Limited took out the loan and pledged a stake in Rosneft as collateral, Vedomosti reported citing documents of the consortium.

The stake was not disclosed, but the price of government’s 19.5% in Rosneft was set at 692 billion rubles, and the same amount plus 18 billion rubles of additional dividends were transferred to the budget on December 16 by state holding Rosneftegaz, the previous owner of the stake, the business daily reported.

But already on December 22, rights for claims under the loan and the collateral were transferred to Rosneftegaz, and on January 3, 2017, the consortium became the owner of the stake and Rosneftegaz lifted the pledge. Conditions of the VTB’s loan and the amount of money paid by Rosneftegaz for the rights were not disclosed. The documents only stipulated that VTB received an interest income of 25.4 million euros, Vedomosti said.

This means that VTB and Rosneftegaz became bridge creditors for Glencore and QIA. Initially Italy’s Intesa Sanpaolo were to provide the bulk of financing, but on December 19 a bank representative said that financing of the deal was still under consideration.

In the end, Intesa provided a 5.2 billion euro loan, QIA provided 2.5 billion euros, and Glencore provided 300 million euros. The remaining 2.2 billion euros plus interest on the debt to Rosneftegaz will be raised through loans from Glencore and QIA, the business daily reported citing documents.

But in February 2016, President Vladimir Putin said that future investors should use their own resources or borrow from private banks to finance privatization deals. A government official said that participation of VTB does not contradict the order as the bank only provided short-term liquidity so that the deal is finished until the end of the year, and rights for claims were reassigned as soon as possible.

QIA could not be reached for comment, Glencore, Intesa and VTB declined to comment. A Rosneft representative said that the deal’s goals were fulfilled, and such a structure was necessary in order to avoid volatility on the currency market.

(59.6067 rubles – U.S. $1)

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