Banks in the dark over $15 billion of promised Rosneft M&A business

Fri May 31, 2013 8:25am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Sophie Sassard and Melissa Akin

LONDON/MOSCOW (Reuters) - Banks that helped Russian oil company Rosneft (ROSN.MM: Quote) finance its $55 billion buyout of rival TNK-BP have been left waiting for their payback - a share in $15 billion in asset sales expected to follow the deal, sources familiar with matter said.

State oil company Rosneft's takeover of TNK-BP this year aimed to create a major oil group producing more oil than Exxon Mobil (XON.N: Quote), but it also tightened the Russian government's grip on the country's energy sector.

The asset sales promised by Rosneft Chief Executive Igor Sechin would offload less-profitable businesses to turn the company into the major oil player the CEO has said he wants it to be. The delay shows Rosneft has a lot on its plate integrating TNK-BP and that the sales are on the back burner.

Rosneft had dangled the juicy divestment mandates at the banks in exchange for a $29.8 billion loan - the largest in Russia's history - on good terms, three out of four sources with direct knowledge of the loan talks said.

"All the lending banks are waiting," said one of the bankers who asked not to be named because the talks are private.

"We thought (refinancing) bonds and asset sales would kick start straight after the closing (of TNK-BP deal). We are now in the dark."

Rosneft declined to comment.

Rosneft's slow motion is frustrating the banks as they would earn fat fees from advising the oil giant on the asset sales this year, which would help boost M&A revenues in an otherwise arid deal making landscape.   Continued...

The logo of Russia's top crude producer Rosneft is seen at the company's headquarters, behind the Kremlin wall, in central Moscow May 27, 2013. REUTERS/Sergei Karpukhin