Gazprombank will help Qatar and Glencore to buy shares of “Rosneft”

Your lender

The third volume of assets the Bank of Russia Gazprombank will Finance a consortium of Glencore and Qatar’s sovereign Fund QIA as part of the transaction for the purchase of privatized 19.5% of Rosneft shares. This was told by Federal official confirmed a source close to the Board of Directors of “Rosneft”.

Last week, Rosneft and Glencore announced that 19.5% of the company valued at €10.2 billion Of them, the consortium will contribute only €2.8 billion of its own funds and another €7.4 billion as a loan will provide Italian Bank Intesa Sanpaolo with an unnamed Russian banks.

Intesa, which has acted as an adviser to the government on the privatization of “Rosneft”, is the organizer of the debt financing. A source at Rosneft told journalists that Intesa will provide “significantly more than 50%”, that is obviously more than €3.7 billion, whereas the financing of the deal involves a syndicate of four or five “core” banks. To secure the loan will fall purchased shares “Rosneft”. Glencore announced in its press release that has agreed to provide guarantees worth up to €1.4 billion in case of reduction in value of the collateral, but at the same time, Russian banks have granted her an exemption from this duty. The exact structure and mechanism of Bank financing of the deal are still unknown, “Rosneft” only reported that other banks excluding Intesa will take part in “securing funding and credit support.”

Representatives of two largest Russian banks — Sberbank and VTB — 11 Dec stated that it is not involved in this transaction. The press service of the third largest Bank Gazprombank, an then declined to comment. Thursday, 15 December, the representative of the Bank also did not respond to a request . The press service of Intesa would not comment on the deal.

The state controls more than 50% of the voting shares in Gazprombank through Gazprom and the Bank, follows from the data on the Bank’s website (.pdf). 1 Feb 2016 President Vladimir Putin at a meeting on privatization said that the state banks should not Finance the transaction for the sale of state assets. “It is necessary that future investors will be looking for their own resources or loans, but not state banks. The good of it will be a little”, — said Putin. Putin’s press Secretary Dmitry Peskov on Thursday, December 15, expressed doubt that the Gazprombank can be considered a government Bank. But before he answered questions on the merits.

How are the companies “Rosneftegaz”

Share in “Rosneft” sells state “Rosneftegaz”. At the end of October 2016, Bloomberg and Reuters reported, citing sources and approved by the government Directive that Rosneftegaz was given permission to place on deposits in Gazprombank of up to 1.8 trillion roubles (at that time — $29 billion) for a period of up to three years. The holding company, the accounts of which, according to Raiffeisenbank, is about 544 billion rubles, often places large, up to several tens of billions of rubles, deposits in state banks, including Gazprombank, said a source in one of banks. In 2014 Rosneftegaz, a total of 36 times placed money on Deposit in the Bank in dollars and rubles for the term from one day up to 579 days, to the report of the state holding for 2014 (he has since ceased to publish statements, changing the form of ownership open joint-stock company (OJSC) joint stock company (JSC), which is not obliged to disclose such information).

Deputy General Director for investments IK “University the Capital” Dmitry Alexandrov says formally, Gazprombank may use funds from the Deposit of “Rosneftegaz” for lending to the buyers of Rosneft’s shares, if the holding used the resolution of the government on the allocation of funds. The analyst noticed that this amount (up to 1.8 trillion rubles) can be accommodated fully or in several stages. The Bank in the case of such a transaction bears the risk of liquidity. After all, a Deposit is required to return by a certain date (in the case of placement of funds on demand — at any time). In the case of such a return of funds is urgent need to involve secured assets.

Besides, one of the main variants of privatization was considered the redemption of shares of “Rosneft”: in October, President Vladimir Putin said that in order to replenish the budget, “Rosneft” can redeem their shares, and then, in 2017, to sell them to third party investors. In this case, part of the funds again, she could provide Rosneftegaz holding, I considered the possibility, reported Reuters citing three sources familiar with the negotiations.

The placement of funds in Gazprombank took place in the reporting of “Rosneftegaz” as related party transactions because the Chairman of the Board Andrei Akimov member of the Board of Directors of “Rosneftegaz”. The provision of a loan of Gazprombank for buying the stake from Rosneftegaz — potentially also deal with interest, says partner of the law office A2 Mikhail Alexandrov: Akimov, most likely, will not be able to vote for the approval of such a loan. In addition to many years of work Akimov to the Board of Directors of “Rosneftegaz” (chaired by CEO of Rosneft Igor Sechin) Gazprombank and “Rosneft” associated and joint level: Rosneftegaz, which sells for 19.5 percent of 69.5% of Rosneft also owns 11% of shares of “Gazprom”, which, in turn, owns 35.5 percent of the shares of the Bank, that is, the indirect share holding in the Bank is 3.9%.

At a meeting with Sechin in the Kremlin on 7 December, Putin suggested that “Rosneftegaz” has helped to convert foreign currency proceeds from the sale of 19.5% of the oil company in the ruble painless for the market: “the market now goes a significant amount of foreign currency, and money must be received in the budget in rubles in rubles, so you need to devise a scheme that would not have negatively affected the market, would not cause any jumps in the currency market”. From “Rosneftegaz”, which eventually needs to transfer the money in the budget, there are significant resources in roubles — it is necessary to use these funds, said the President.

Glencore and Qatar have been chosen by buyers because they were willing to “pay fast”, “quickly to provide needed liquidity,” said on Thursday, Prime Minister Dmitry Medvedev in interview to five TV channels, including . In November, the government ordered “Rosneftegaz” to sell a share in “Rosneft” for 710,8 billion rubles., in December, given the agreement with Glencore and QIA, reduced the amount to 692 billion rubles. the Resulting difference of 18 billion RUB, it was decided to cover the expense of increase in dividends “Rosneftegaz” (the Prime Minister signed a Directive), told Medvedev on Thursday.

With the participation of Polina Khimshiashvili