Rosneft raises $16.8bn for TNK-BP takeover
Moscow, December 25, 2012
Rosneft, seeking to finance Russia's largest-ever takeover deal, has raised $16.8 billion in bank loans and agreed on long-term trade finance deals with the world's largest oil traders, Glencore and Vitol.
The state-controlled company said yesterday the loans raised from Western banks would be sufficient to cover its acquisition of the 50 per cent of Anglo-Russian oil firm TNK-BP which it is buying from BP for $27 billion in cash and stock.
The company also said it has agreed terms with Glencore and Vitol to supply them with up to 67 million tonnes of crude oil over five years under a trade finance deal, equivalent to around 270,000 barrels a day of oil.
Rosneft is due to buy the rest of TNK-BP from the AAR consortium of Russian-born business tycoons for $28 billion, completing the takeover of Russia's third-biggest oil producer to make Rosneft the world's largest listed oil company, with daily output equivalent to 4.6 million barrels per day.
It was not clear whether the oil supply deals would help pay for the purchase of AAR's stake in TNK-BP but sources close to Rosneft and potential lenders said recently that Rosneft had been in talks about using future oil exports as collateral to help pay for the TNK-BP deal.
Industry sources said the deals will give Rosneft around $10bn in advance payments from the traders, who will in turn borrow the money from their banks, in return for securing long-term access to oil from the world's largest-producing nation.
"The price formula is in line with the prices Rosneft receives for crude at medium-term tenders," Rosneft's chief executive Igor Sechin said.
Assuming the full volumes are delivered, Rosneft would supply the oil traders with around 270,000 barrels per day of oil - or over a 10th of its current output.-Reuters
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