Glencore, Qatar Commit US$3b in equity to Rosneft stake
[MOSCOW] Glencore Plc and Qatar's sovereign wealth fund are using US$3 billion in equity and $7.8 billion in financing from a bank consortium led by Italian lender Intesa Sanpaolo SpA to buy their stake in Russian oil company Rosneft PJSC.
The financing will be backed by the two companies' shares in the oil group, Rosneft said in a statement on Saturday. Glencore had already said Wednesday that it'd invest 300 million euros(S$453.1 million) in equity, leaving Qatar, the largest shareholder in the commodities trader, shouldering about US$2.7 billion for the 19.5 per cent stake in the oil company. Glencore said late Saturday that Russian banks will guarantee up to 1.4 billion euros of financing, without disclosing their names.
The announcement on financing marks a step forward in what was a surprise deal struck despite US and European Union sanctions against Russia. It's the largest foreign investment in Russia since the crisis in Ukraine in 2014 and has been widely seen as a triumph for both Rosneft Chief Executive Officer Igor Sechin and Russian President Vladimir Putin who announced Rosneft's partial privatization on state television earlier this week.
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