Glencore and QIA has terminated the agreement to sell 14,16% of shares of “Rosneft” Chinese CEFC

TASS, 4 may. Trader Glencore and Qatar’s sovereign wealth Fund (QIA) has terminated the agreement with China CEFC energy company on the sale of her 14,16% of shares of “Rosneft”. This is stated in the message Glencore, published on the London stock exchange.

“The consortium today sent a notice about the CEFC the termination of this agreement in accordance with its terms. Thus, the sales offer is no longer valid”, – stated in the message

QIA will be the owner was 18.93% stake in Rosneft, after the termination of the agreement. The package of shares of “Rosneft” intended for sale CEFC will be transferred to a subsidiary of Qatar Foundation. Following the transaction, Glencore will receive €3.7 billion and will retain a 0.57 percent stake in Rosneft.

“Rosneft” declared that they would support this decision and are counting on new mutually beneficial projects with the sovereign wealth Fund of Qatar.

Plans for the sale of shares of “Rosneft”

The consortium QIA and Glencore closed a deal to buy a 19.5% stake in Rosneft in January 2017. Plans to sell Chinese CEFC 14,16% of the oil company was announced in September 2017. In October, the head of “Rosneft” Igor Sechin said that the company’s shareholders fully formed, and the closing of the transaction expected before the end of 2017.

It was reported that СEFC will pay for the purchase of 14,16% of shares of “Rosneft” of $9.1 billion, including 16% premium to the market. The proceeds from the sale of the package, the consortium planned to direct for repayment of involved in the Italian Intesa Bank loan of €5.2 billion.

The main shareholder of Rosneft is state-controlled Rosneftegaz (50% plus one share), another 19.75% of the shares owned by BP.

Problems CEFC

In February 2018, the Swiss trader Glencore has said it expects to close the transaction with the CEFC in the first half of 2018. At the same time, mainly in the Chinese media began to report about the problems faced by the CEFC.

In particular, it was reported that the head of the CEFC E Jianmin is detained and is under investigation, however, the company denied this information.

Also the media became aware of the difficulties in attracting Chinese company funds for the purchase of shares of “Rosneft”, despite the readiness of the Russian VTB to provide €5 billion as a loan and the sale of assets of the CEFC.

Official confirmation of this information was not. However, on 25 April Vice-Director of the international research division of the CEFC Zhuang Jianzhong said that the company intends to complete the acquisition of shares of “Rosneft”, despite financial difficulties and the prospects for significant reduction of its staff. Then he said that “the transaction on purchase of shares in “Rosneft” it will be much more difficult, but the negotiations continue.”