UPDATE: Glencore, QIA sell 14.16% in Rosneft to China’s CEFC

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MOSCOW, Sep 8 (PRIME) -- A consortium of Swiss trader Glencore and the Qatar Investment Authority (QIA) is selling a 14.16% stake in Russian oil major Rosneft to China’s CEFC, Glencore said in a statement on Friday.

Glencore and QIA bought 19.5% in Rosneft in December 2016 during the company’s privatization.

The shares will be sold with a premium of around 16% to the average price over the last 30 days.

As a result of the deal, Glencore will have 0.5% in Rosneft, and QIA will own 4.7%.

Rosneft’s shares grew almost 3% on the Moscow Exchange on the statement.

Rosneft CEO Igor Sechin confirmed the deal and said the consortium sold the stake to reduce its debt burden.

“A total of 19.5% ùà Rosneft shares were sold, direct financing was earmarked for around 5.3%, while the 14.2% stake was purchased with borrowed funds provided by European banks. But recently volatility on financial markets has led to a serious devaluation of the dollar against the euro, and the costs of servicing this loan have become quite serious. This is why the consortium comprising the Qatari fund and Glencore has decided to find an additional partner to ensure direct ownership of these shares without a debt burden,” Sechin told Rossiya 24 television channel.

Sechin welcomed the new shareholder.

“It is a serious event for us, which on the whole forms the company’s shareholding structure in the final form. We are glad that this is this Chinese company. We hope that this partner will give us a possibility to get a synergy effect from cooperation,” Sechin said.

CEFC will take part in Rosneft’s production projects in East Siberia and petrochemical projects as a minority shareholder, Sechin also said.

“In continuation of this deal we have agreed with the corporation’s management and signed relevant documents on their participation as a minority shareholder in a number of projects on the Russian territory that are being implemented by Rosneft. We are first of all talking about production projects in East Siberia, participation in petrochemical and other projects is also being considered,” Sechin said.

“But this does not mean that we will stop cooperating with our traditional partners. We will maintain closest relations with our traditional partners, such as CNPC, Sinopec, Beijing Gas, ChemChina and other companies, with whom we have been cooperating for a long time.”

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