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bne October 2017 Companies & Markets I 11
On the face of it Igor Sechin, the CEO of both the oil company and its holding company – and a close associate of President Vladimir Putin – announced he had pulled off a deal to sell the stake to oil trade Glencore and the Qatar sovereign wealth fund, raising €10.2bn in the process in December.
Italy’s Intesa Sanpaolo Bank came up with the financing, but only provided €5.2bn, the bank said on January 2 – half the deal’s reported value. Subsequently the bank said that it was having problems raising the money as a syndication deal it organized collapsed in August thanks to the new US sanctions. Intesa said its €5.2bn loan was reimbursed on August 8 following the CEFC deal.
“Intesa Sanpaolo Bank said that it was having problems raising the money as a syndication deal”
However, it has become increasingly clear that the December privatisation was little more than a complicated loan mecha- nism. That probably means that much of the money “raised” by the privatisation has still not been received by the state. The sale of the stake to CEFC, however, is the real deal and will bring in real cash for the budget.
"The implication is that the [privatisation] was essentially a loan to the Russian government that was struggling to finance its 2016 fiscal budget, and that Russia is obliged to repay the loan," Aton Equity commented on June 8 when speculation on a sale of a stake to China first came up.
CEFC is Beijing’s go-to state energy company that represents China’s interests in the energy sector. It has grown fast in recent years and become a key partner for Russia.
Glencore said in a statement that CEFC will buy shares at a premium of around 16% to the 30-day volume weighted average price of Rosneft shares without naming the price. A CEFC spokesman said the company would pay $9.1bn, according to Reuters, which is exactly $1bn more than
a 14.16% stake should be worth given Rosneft’s current market valuation of $57bn.
Sechin told reporters CEFC would get access to Rosneft’s oil fields and petrochemical projects in East Siberia to guarantee bigger synergies, following the announcement of the Chinese deal. CEFC said the deal would give it annual equity oil production of 42mn tonnes (840,000 barrels per day) and access to oil and gas reserves of 2.67bn tonnes (20bn barrels), according to Reuters.
Warsaw rated most attractive financial centre in CEE
bne IntelliNews
W
arsaw has beaten the rest of Central and Eastern Europe (CEE) in a ranking of the attractiveness of financial centres in the world, according to
a recent report.
Warsaw improved its position five spots to 36th place
in the compiled by China Development Institute and London-based consultancy Z/Yen. The report measures the attractiveness of financial hubs in five areas: business environment, human capital, infrastructure, development of financial sector, and reputation.
The Estonian capital Tallinn came in as the second most attractive financial centre in the region, and in 44th position on the overall ranking, dropping two spots.
Riga slipped eight positions to 53rd position, while Prague came in at the 58th spot, after improving 11 places compared to the previous report that came out in March. Budapest
fell two spots to the 72nd place, the worst of the CEE cities ranked.
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