Moscow: Rosneft, seeking to wrap up Russia’s largest ever takeover deal, has raised $16.8 billion in bank loans and signed long-term supply deals with two leading oil traders that could be worth as much as $50 billion.
The state-controlled Russian oil major said on Monday the loans raised from Western banks would be sufficient to pay for the 50% of Anglo-Russian oil firm TNK-BP it is buying from BP for $27 billion in cash and stock.
Rosneft has agreed to pay a total of $55 billion to buy TNK-BP, Russia’s No.3 oil firm, in a deal that would create the world’s largest publicly listed oil firm, with daily oil and gas output equivalent to 4.6 million barrels per day.
In a second announcement, Rosneft said it had agreed heads of terms on long-term crude supply contracts, with pre-payment, with international traders Glencore and Vitol.
Rosneft plans to sign contracts with a duration of 5 years to supply up to 67 million tonnes of crude oil.
“The price formula is in line with the prices Rosneft receives for crude at medium-term tenders,” Rosneft’s CEO, Igor Sechin, said in the statement.
Assuming the full volumes are delivered, Rosneft would supply the oil traders around 270,000 barrels per day of oil. If the oil price averages $100 per barrel, the contracts would on paper be worth around $50 billion.
Sources close to Rosneft and potential lenders told Reuters recently that Rosneft and its oil buyers were in talks on long-term deals, using future oil exports as collateral, to help pay for the TNK-BP deal.
In the second leg of the takeover, which has yet to be financed, Rosneft has agreed to pay $28 billion in cash to the AAR consortium, representing billionaires Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik.
Subject to regulatory approvals, the transaction is expected to close in the first half of 2013, Rosneft has said.
Commenting on the bank financing it had raised for the purchase of BP’s 50% in TNK-BP, Rosneft said it had obtained a 5-year loan of $4.1 billion and a 2-year loan of $12.7 billion from a group of international banks. Rosneft will buy out BP’s half stake in TNK-BP for $17.1 billion in cash and 12.8% of its own shares.
It said the banks include Bank of America Merrill Lynch, Barclays Bank, BNP Paribas, BTMU, Citibank, Credit Agricole, ING Bank, Intesa Sanpaolo Banking Group, J.P. Morgan, Mizuho Corporate Bank, Natixis, Nordea Bank, SMBC, Societe Generale and Unicredit Bank.
Sources familiar with the matter have said that Rosneft could also refinance up to $10 billion of the cost of the TNK-BP takeover deal on the bond market, ultimately raising more than it needs to close the transaction.