Andrei Kostin financed Igor Sechin's "privatization" of a stake in Rosneft. The cunning privatization of Rosneft: what did Sechin think? Glencore dumped risk on Russian banks

The deal to sell 19.5% of Rosneft to the foreign consortium Glencore and Qatar's sovereign wealth fund has been signed. Rosneftegaz will pay a special dividend to the treasury, Intesa Bank will lend €7 billion to buyers

Rosneft headquarters in Moscow (Photo: Andrey Rudakov/Bloomberg)

Rosneft and Swiss-based commodity trader Glencore announced the signing of an agreement to sell a 19.5% stake in Rosneft to the international consortium Glencore and Qatar's sovereign wealth fund.

It turns out that Rosneftegaz sold its stake in Rosneft 2.6% cheaper than the government ordered. Another 18 billion rubles. he will pay extra to the budget in the form of "additional dividends" in order to fulfill the government's order. The price of 692 billion rubles, which is paid by the consortium of buyers, is determined based on the exchange value of Rosneft shares at the close of trading on December 6, using the same 5% discount.

“The government’s decision on the sale will be implemented,” a source close to one of the parties to the transaction explains to RBC. The sale price corresponds to the level of 692 billion rubles. The difference with the amount specified in the government's order will be compensated by additional transfers to the budget from Rosneftegaz, he adds.

At the same time, the government expected to receive 703.5 billion rubles in the budget in 2016. from the privatization of 19.5% of Rosneft, followed from the explanatory note to the amendments to the 2016 budget (which were signed by the president on November 22). The same amount was announced on December 8 by Finance Minister Anton Siluanov on the air of Rossiya 1. From this point of view, Rosneftegaz will transfer 1% more to the budget than planned. Plan to attract 703.5 billion rubles. “Due to additional dividends from Rosneftegaz, based on the results of the sale of a 19.5% stake in Rosneft, it was budgeted in early October, when the Ministry of Finance first drafted budget amendments, that is, even before the privatization of Bashneft.

A representative of the secretariat of Igor Shuvalov and a spokesman for Prime Minister Dmitry Medvedev did not respond to requests from RBC.

​Qatar pays more but won't explain why

Synchronous statements by Rosneft and Glencore on Saturday cleared up what remained after Russian President Vladimir Putin and Rosneft CEO Igor Sechin announced the deal with the Glencore-Qatar consortium as completed at a Kremlin meeting on December 7. Glencore clarified a few hours later that the parties were still negotiating. Putin and Sechin called the cost of the deal at €10.5 billion, while Glencore - €300 million less. The Qatari sovereign wealth fund did not comment on the Kremlin's statement at all, and its share in financing the deal remained unknown. It was also not disclosed who would lend to the multi-billion dollar purchase, although sources from RBC and Western news agencies pointed to the Italian bank Intesa.

“The transaction demonstrates our strategy to invest in high quality assets with strategic partners around the world to generate long-term financial income,” the press service of Rosneft quotes Sheikh Abdullah bin Mohammed bin Saud al-Thani, President of the Sovereign Fund of Qatar.

The conditions for Glencore and Qatar to enter the capital of Rosneft are not equal, judging by the published details of the transaction (the QIA has not yet released any announcement about it). The Swiss trader will contribute only €300m (roughly 0.6% of Glencore's current market capitalization) to the deal versus Qatar's €2.5bn, although their shares in the consortium will be the same 50/50, Glencore confirmed in a statement. 9.75% of the capital of Rosneft will be due to the share of Glencore. At the same time, Glencore, under a new five-year contract with Rosneft, will have access to an additional 220,000 barrels of oil. on the day of Russian oil, which will probably allow him to become the largest oil trader of Rosneft (now Trafigura).

“The silence from Qatar is very strange, especially considering that they contribute the most equity into a deal,” said Craig Pirrong, professor of finance at the University of Houston, an expert on commodity trading markets, to RBC.

Glencore dumped risk on Russian banks

In addition, bank financing of the transaction will be organized in such a way that Glencore will not be liable for its assets to creditors (non-recourse loan). The risk of Glencore as a shareholder through a consortium and "structured agreements" will be limited to a level of €300 million, follows from the message of Rosneft (it is not explained what kind of structured agreements these are). Glencore will provide guarantees for a bank loan of up to €1.4 billion, but in the event of a guarantee event, this amount is fully insured in "relevant Russian banks," Glencore said in a statement. As part of the loan, organized by Intesa, there will be a syndicate of Russian banks in the amount of €1.4 billion, a source in banking circles told RBC. The press service of VTB already says that VTB does not know which Russian banks are in question: "We have no relationship with Glencore." Representatives of Gazprombank, Otkritie Bank, owned by Rosneft, RRDB, and Intesa Bank did not respond to RBC's requests.

Why we are talking about €1.4 billion is not clear from the reports of Rosneft and Glencore. Lender (Intesa) may require an additional deposit Money in the event of a fall in the price of Rosneft shares on the market, but Glencore agreed with unnamed Russian banks that they would pay this requirement, Pirrong suggests. It is possible that banks will issue a put option on the Rosneft shares pledged under the loan (the option will allow them to be sold at a predetermined price in case their shares fall). market value), argues Pirrong, but the other side of this derivative is unknown. Rosneft itself did not take part in the deal as a guarantor of obligations to creditors, a company source said.

Glencore will pledge more than half of the acquired shares of Rosneft under a loan, a source in Rosneft told reporters, RIA Novosti reported. That is, more than 4.88% of the shares of Rosneft will be pledged by Glencore (how much the Qatari fund will pledge is not reported). “The new shareholders are conducting the deal like an LBO: they pledge the asset as financial leverage and use part of their funds to cover,” the source said.

With the participation of Marina Bozhko

The "breakthrough" of Putin's business into the open world turned out to be a cabal, as a result of which the state bank VTB acquired shares in Sechin's toxic Rosneft.

“I want to congratulate you,” Russian President Vladimir Putin said to his colleague Igor Sechin, greeting him with a strong handshake in the Kremlin in December 2016.

Sechin has just announced the sale of a 19.5 percent stake in oil giant Rosneft, which he heads, to Qatar sovereign wealth fund and commodity trader Glencore.

The €10.2 billion ($11.5 billion) privatization deal was desperately needed to replenish a Russian treasury depleted by falling energy prices and Western sanctions.

Some Russian officials said the deal was proof that despite growing political isolation from the West, Russia is still capable of attracting global investors.

Now, nearly two years after the sale was announced, nine people familiar with the deal told Reuters that Russia's state-owned bank VTB financed a significant portion of the deal, contrary to its stated goal of bringing foreign money into Russia.

Based on information from five sources, the size of the Russian loan to the Qatari sovereign wealth fund was about $6 billion.

VTB denies issuing a loan to a Qatar fund - Qatar Investment Authority (QIA): "VTB has not allocated and does not plan to allocate a loan to QIA to finance the acquisition."

VTB's September financials, posted on the Russian Central Bank's website, showed that VTB lent 434 billion rubles ($6.7 billion) to unnamed foreign borrowers for up to three years, after borrowing 350 billion rubles from the CBR itself.

VTB declined to comment on these transactions. The CBR did not respond to questions.

QIA declined to comment. The Kremlin did not respond to a request for comment. Rosneft did not respond to questions about the VTB loan to Qatar.

EFFICIENT PRIVATIZATION

Rosneft is the world's largest oil company in terms of production, whose shares are traded on the stock exchange, it is a pearl in the Russian corporate crown.

However, Sechin faced the difficult task of finding buyers or lenders willing to risk their money and buy a stake in Rosneft in the face of sanctions against the Russian Federation and the prospect of their tightening.

Sanctions imposed on Russia after the annexation of Ukrainian Crimea in 2014 restrict access Russian companies to international debt markets.

After all, Russia had to lend them billions to attract foreign investors, the sources say. Two people familiar with the deal said that the presence of a third party financing a large part of the transaction was a condition for Qatar's acquisition of a stake in Rosneft.

Now that oil prices are well above late 2016 levels, Russia's need for foreign money has dwindled.

But if she has to go out again international markets, the history of Rosneft's stake sale points to the challenges it may face in trying to attract foreign investors, especially if the US expands sanctions against Russia.

Nine sources who told Reuters about the VTB loan to Qatar include a source close to VTB management, a Central Bank official, and a Russian government source familiar with foreign investment in Russia.

At least four sources were directly involved in loan preparation. All sources spoke on condition of anonymity as they are not authorized to discuss the deal.

In response to a question about how the privatization went, Rosneft said that the deal was transparent and market-based, and also in the interests of all shareholders.

The company said that all decisions related to the transaction have passed the appropriate corporate approval procedures, the transaction was supported by the governments of the participating countries and passed through the control procedures in the relevant jurisdictions.

"It unique example effective privatization,” Rosneft said in a statement.

FROM THE BAY TO JAPAN

By the end of 2016, pressure on Sechin, one of Putin's closest allies, began to mount. The government has publicly announced that it will sell 19.5 percent of Rosneft's shares before the end of the year.

The state budget, hit by lower oil prices, the economic downturn and Western sanctions, ran a deficit of 3.5 percent of GDP. The Russian economy was in its second year of recession and there was no prospect of a quick recovery of public finances.

By the fall of 2016, Sechin, now 58, believed he had found a potential buyer: the sovereign wealth fund of the United United Arab Emirates Mubadala.

The fund has agreed to buy the stake, two people familiar with the developments said. But talks stalled after Rosneft changed the price of the stake twice, forcing the UAE to pull out of the deal, two sources said.

Mubadala declined to comment. Rosneft did not respond to questions about talks with Mubadala.

After that, Sechin turned his eyes to the east, starting negotiations with Japanese officials, the source said. Russian government and a source close to Rosneft. This is also evidenced by the recording of the conversation with the participation of Sechin, which appeared in the framework of a court case in which he was a witness.

Negotiations were mainly held with the Minister of Economy, Trade and Industry of Japan, Hiroshige Seko.

If a deal were struck, the stake would be owned by a major Japanese investment fund, such as the $1.4 trillion state pension fund GPIF, which has $1.4 trillion in assets under management, or the national oil, gas and metals corporation, JOGMEC, three people familiar with the talks told Reuters.

According to Sechin, the recording, which was played in court, got in the way of the deal when Japan insisted on linking it to progress in the territorial dispute over the Kuril Islands.

In the end, the deal fell through.

Japan's Ministry of Economy, Trade and Industry did not respond to questions. Rosneft did not respond to questions about talks with Japan. The press service of JOGMEC said that they could not comment. GPIF said it would not comment on the intergovernmental negotiations as it did not directly participate in them.

QATAR HELP?

Unable to find a buyer, Sechin focused on new candidates: Qatari sovereign wealth fund QIA and international trader Glencore.

Neither was willing to pay full price, three sources said.

In the past, Rosneft has relied on major Western banks such as Deutsche Bank and JP Morgan to finance transactions. However, international lenders have not announced new deals with Rosneft since sanctions were imposed on Russia in 2014.

Entering the game was Intesa SanPaolo, a medium-sized Italian bank with little experience in large Russian corporate transactions.

By the beginning of December 2016, a deal financing plan was in place. Buyers allocated part own funds: Qatar - 2.5 billion euros, Glencore - 300 million euros.

The remainder came from debt, of which Intesa contributed €5.2 billion. The missing part, according to Glencore, should have been provided by Russian banks. These creditors were never named.

The amount attributable to Russian banks was about $2.5 billion. Two banking sources close to Rosneft told Reuters that VTB was one of the banks that took part in $2.5 billion in loans in 2016.

Those sources said the other banks were Gazprombank and FC Otkritie, which, like VTB, are linked to the state, although Otkritie was private at the time of the deal.

It is not clear how much of the $2.5 billion each Russian bank provided.

VTB's participation in raising $2.5 billion is unrelated to the roughly $6 billion that nine sources say VTB provided to Qatar this year.

When asked about $2.5 billion in loans, VTB replied that it did not provide financing, but was the coordinating bank on behalf of Rosneft.

Opening declined to comment, Gazprombank did not answer questions.

For the largest share of the funding, a €5.2 billion loan from Intesa, the Italian bank planned to syndicate the funds, a common practice designed to disperse risk and reduce the burden on the bank's capital.

However, two banking sources and a source close to the Italian side of the deal said the syndication fell through because Western banks approached by Intesa were too risk-averse as Rosneft and Sechin are under U.S. sanctions.

Intesa declined to comment.

ANOTHER FAILURE

At the time of the deal's announcement in December 2016 and in the weeks following it, Russian officials publicly long term partnership with the new shareholders of Rosneft - Qatar and Glencore.

However, when in September 2017 Sechin announced the purchase of 14.2 percent of Rosneft from a consortium of Qatar and Glencore of the Chinese energy company CEFC, it became clear that the deal was not yet completed.

Explaining why the initial deal fell through, he told Russian state television that the new shareholders felt the cost of servicing the debt was too high.

However, the deal with CEFC was never closed due to the investigation of the head of the company, Ye Jianmin, who was under investigation due to suspicions of committing economic crimes.

Nothing is known about the status of the investigation since then, or whether Ye Jianmin has been charged. Ye's name was nonetheless mentioned in connection with a bribery case against a senior Chinese Communist Party official, state-run CCTV reported in September.

Neither E nor CEFC responded to a request for comment.

Sechin again had to look for a buyer.

As a result, in May 2018, Qatar agreed to become the owner of a stake in Rosneft financed by Intesa.

Officially, no one has said how the new deal with Qatar was financed, or by whom the funds were provided.

But participation in it Intesa ended.

The document, dated September 6, 2018 and entered in the business register of Singapore, where the company is registered, which owned Rosneft shares on behalf of Qatar and Glencore, indicates that Intesa has ceased to be a creditor and does not hold shares as collateral.

The document does not indicate who became the new creditor. According to nine sources familiar with the agreements, this creditor is VTB.

At a reception at the Italian embassy in Moscow on the occasion of receiving the Order of Merit for the Italian Republic last November, Sechin held a gray-haired man in fashionable glasses by the arm.

It was Andrey Kostin, the head of the bank that helped finance the privatization - VTB.

The sale of a 19.5% stake in Rosneft came as a shock to the West and its spokesmen. Liberal analysts believed that anti-Russian sanctions would ensure a reliable credit and investment blockade of our country, as a result of which Rosneft would be forced to buy back its shares itself.

Various calculations have even been published on how much the ruble will weaken if Rosneft buys back its shares through loans (including from the state), and the federal budget directs the funds received to replenish the Reserve Fund by buying foreign currency for this on the stock exchange.

These and many other speculations have failed, and their authors try not to remember them, spending, as after Trump's victory, a noticeable amount of time erasing their posts on social networks.

"Putin outplayed everyone," writes the Wall Street Journal, which stands out against the background of even the Western media with its tough anti-Russian position. Called by the President of Russia "the largest privatization deal in the oil and gas sector in the world in 2016," the sale on December 7 of 19.5% of Rosneft's shares was a breakthrough in the sanctions blockade and brought the budget 10.5 billion euros. At the same time, Rosneft's dividends will now amount to 35%, and such a change in the dividend policy is part of an integral privatization deal.

Initially, the minimum selling price of the stake was set at 500 billion rubles. According to the amendments to the law "On the federal budget" for 2016, adopted in the State Duma and approved by the president, "the state should have received 703.5 billion from the sale of Rosneft shares. In fact, the budget will receive 710.8 billion; investors' premium from current stock quotes amounted to the minimum for such transactions of 5%, which seems to be an outstanding success of the Rosneft management, which was looking for investors (negotiations with more than 30 potential buyers are reported) and "rammed" them.

It is fundamentally important that the transaction is of a strategic nature and increases the value of the company, qualitatively expanding and consolidating its capabilities with partners reliably connected with it.

On the one hand, the largest commodity trader Glencore, who overcame serious financial difficulties, unlike other potential partners, does not limit Rosneft to a specific region, but ensures the global scale of its operations. The increase in the volume of oil sold through it (more than doubling) is complemented by the harmonization of positions on the market, which is very valuable for Rosneft. And lending to Glencore by one of the largest European banks indirectly returns Rosneft to Western financial markets.

One of the world's largest sovereign funds, Qatar Investment Authority, is showing interest in oil production projects in Russia and may well follow the example of BP, which, having become the largest minority shareholder Rosneft began to actively invest in the development of its Siberian fields. It is fundamentally important that other investors from the Persian Gulf countries may follow the example of Qatar, very jealously following each other's activity.

The geopolitical aspect of the operation is no less important: in the Middle East crisis, the Qatari authorities, focusing on the United States, were traditional opponents of Russia and its allies, and at times exceptionally tough. The change in the American administration deprived them, like many other US satellites around the world, of global cover and, perhaps, forced them to rethink, even if only partially, their position. The acquisition of the Rosneft stake objectively links the Qatari authorities with Russia and, at a minimum, even if their former geopolitical aspirations are preserved, it seriously limits their freedom of action. On the whole, cooperation with Qatar can have an impact on its entire position both in the Middle East and in Africa, where its expansion is a very tangible deterrent for China.

It is no coincidence that only as a result of the announcement of the deal, the quotes of Rosneft jumped by 5%, setting a record, and market capitalization exceeded 4 trillion rubles for the first time. At the same time, the value of the state block of shares increased by $1.3 billion, and the cumulative effect of the operation for the state (including direct budget revenues from the privatization of Bashneft $5.16 billion and the block of Rosneft $11.12 billion, as well as additional capitalization of the state block shares of Rosneft due to the synergistic effect after the merger with Bashneft $ 1.25 billion, the additional capitalization of the state stake after the announcement of the sale of Rosneft shares $ 1.33 billion and the attraction of first-class global investors) amounted to about $ 19 billion. From a purely commercial point of view, the deal seems to be beneficial for Russia. The probable use of Rosneft shares as collateral for the deal objectively interests both investors in maintaining and increasing quotations. At the same time, the state retains a controlling stake, and in general the structure share capital provides a harmonious balance of interests.

On the whole, Rosneft's management has turned the privatization of its stake from a traditional portfolio deal into a deep and multi-level strategic operation, the positive consequences of which for Russia will manifest themselves for a long time to come, and sometimes in quite unexpected ways.

The head of Rosneft, Igor Sechin, reported to President Vladimir Putin on the sale of a 19.5% stake in the company for €10.5 billion. The buyers were Glencore and the sovereign fund Qatar Investment Authority, which will each receive 9.75% of Rosneft

Main Executive Director Rosneft Igor Sechin and Russian President Vladimir Putin. February 2015 (Photo: Mikhail Klimentiev / Press Service of the President of the Russian Federation / TASS)

$17.5 billion in two months

Rosneft Chief Executive Officer Igor Sechin reported to President Vladimir Putin in the Kremlin on the completion of the company's privatization deal, according to the Kremlin's website. The budget will receive €10.5 billion from privatization (721.25 billion rubles at the exchange rate of the Central Bank on December 7), Putin said. And together with a controlling stake in Bashneft, which Rosneft bought on October 12 for $5.3 billion, $17.5 billion, he added.

“Even in the first part, this is the largest privatization deal, the largest sale and acquisition in the oil and gas sector in the world for the outgoing 2016,” Putin stressed.

The buyers of 19.5% of Rosneft were a consortium of the world's largest trading Glencore and the sovereign Qatar Investment Authority (as of June, it had $335 billion under management). “I hope that their arrival in the management bodies will improve corporate procedures, the transparency of the company and, accordingly, will ultimately lead to an increase in capitalization,” the president said. Glencore and Qatar Investment Authority will receive 50% each in this consortium, Sechin specified (quote from RIA Novosti). That is, the effective share of each buyer is 9.75%. This is the third largest package after the state-owned Rosneftegaz (its share will decrease from 69.5% to 50% plus three shares) and BP (19.75%).

“The deal was made on an upward trend in oil prices, respectively, this is reflected in the value of the company itself,” Putin is sure. Just on November 30, the OPEC countries agreed to reduce production for the first time in eight years, in anticipation of this decision and after its adoption, oil quotes exceeded $50 per barrel On Wednesday, Brent crude traded at $53.15 a barrel.

Sechin said that as part of preparing this deal, Rosneft held talks with more than 30 potential investors — companies, funds, professional investors, sovereign wealth funds, financial institutions from Europe, America, the Middle East, and countries in the Asia-Pacific region.

Sechin and Rosneft's first vice-president for economics and finance, Pavel Fedorov, have been on business trips abroad in the past few weeks - they met with potential applicants for 19.5% of Rosneft. This was told to RBC by a friend of top managers and confirmed by a federal official. That is why the head of Rosneft was not at the announcement of Putin's Address to the Federal Assembly on December 1 in the Kremlin (they usually invite representatives big business), said one of the interlocutors of RBC.

And the day before, on Tuesday, the head of Glencore, Ivan Glasenberg, arrived in Moscow for a Sberbank conference on metallurgy. Then he refused to communicate with an RBC correspondent, saying that he was in a hurry ("I "m in a rush," Glasenberg said). Glencore only in early December announced that it had completed a global asset sale of $ 4.7 billion to reduce debt ( by the end of the year should be reduced to $16.5-17.5 billion.) At the same time, Glasenberg said that the company was again ready to make purchases.

Sechin assured that this deal is “not just a portfolio investment”, but “strategic”: the company, together with the consortium members, will create a joint venture in the field of oil production both in Russia and in the world and will “coordinate positions in the markets.” In addition, this deal includes an oil supply contract with Glencore, he added.

“Given the most difficult external economic situation and extremely short deadlines for such projects, I report that such a deal became possible only thanks to your personal contribution, the support that we received from you in the course of this work,” said the head of Rosneft, addressing Putin. By order of the government, published in early November, the deal to sell 19.5% of Rosneft was to be completed by December 5, and the money from the deal should go to the budget by December 15.

Rosneft spokesman Mikhail Leontiev declined to comment on the terms of the deal. Its amount (721.25 billion rubles) turned out to be higher than the minimum price specified in the government's order - 710.8 billion rubles. But according to the results of trading on Wednesday, December 7, on the Moscow Exchange, 19.5% of Rosneft cost even more - 736.2 billion rubles. The discount to the market price of Rosneft on the stock exchange on December 6 was only 5%, Sechin noted.

unexpected news

Since the privatization of 19.5% of Rosneft had to be completed in a short time, before the end of 2016, in order to replenish the deficit budget, Rosneft itself was considered the most realistic contender for this package. Putin spoke about this "interim" option (it was assumed that Rosneft would then resell its shares to third-party investors) back in October. And last week, his assistant and chairman of the board of directors of Rosneft, Andrey Belousov, said that the government is still considering two options for privatizing Rosneft shares - "either it will be an investor, or it will be a buy-back." But first of all, the company's management should come up with a proposal on the format of the deal, he emphasized. In order to clarify the situation, he even sent a letter to Sechin. He answered him on time, December 1. “Everything, we have complete clarity. [Management] answered those questions that I had as the chairman of the board of directors of Rosneft, Igor Ivanovich [Sechin] answered, ”the official said then.

The sale of 19.5% of Rosneft to a consortium of Glencore and Qatar Investment Authority is unexpected news for the market, obviously, this is Sechin's personal merit, says Vitaly Kryukov, director of Small Letters. He points out that the arrival of the Qatari fund, which has not previously been seen in large investments in the Russian oil industry, is especially interesting, while Glencore is already part of the capital of RussNeft (owns 25%) and is a major buyer of Russian oil. He believes that with Qatar being an OPEC member, there may now be new projects in the Russian oil industry after this transaction. This is indeed the largest transaction in the global energy market, notes Anton Usov, partner of KPMG in Russia. Real privatization has taken place, the arrival of foreign investors in the Russian oil industry at this rather difficult time for the oil industry is very positive news, he adds.

At a meeting with Sechin, Putin instructed Rosneft to develop the safest scheme for the financial market to convert €10.5 billion from the sale of a 19.5% stake in Rosneft to be credited to the federal budget. “A significant amount of foreign currency will now enter the financial market, the money should go to the budget in ruble terms, so we need to develop a scheme that would not negatively affect the market, would not cause any jumps in the foreign exchange market,” Putin said. . He recalled that Rosneftegaz, which ultimately must transfer money to the budget, has significant resources in rubles. In addition, he instructed Rosneft, together with the Ministry of Finance and the Central Bank, to develop "stage-by-stage movements" for currency conversion so that there would be no fluctuations in financial market. “We are in contact with the Central Bank and the Ministry of Finance, we will definitely report to the Prime Minister [Dmitry Medvedev] and develop a scheme that guarantees a minimal impact on the market,” Sechin promised him.

With the participation of Lyudmila Podobedova

The head of Rosneft, Igor Sechin, informed Russian President Vladimir Putin about the completion of the deal to privatize the company. This was reported to journalists on Wednesday, December 7, by the press secretary of the head of state Dmitry Peskov.

According to him, a consortium of Glencore companies and the sovereign wealth fund of Qatar became strategic investors in the privatization of shares, TASS reports. The consortium members have equal shares of 50%.

"I really hope that the arrival of new investors - this is a consortium of the Qatari state fund and the world's largest international trading company Glencore - I hope that their arrival in the management bodies will improve corporate procedures, transparency of the company and, accordingly, will ultimately lead to growth in capitalization, while the controlling stake in the company itself remains in the hands of the Russian state - more than 50 percent," the president said.

Putin believes that the privatization deal was made on an uptrend, at a good time, and that this should not lead to ruble fluctuations in the foreign exchange market.

The country's budget will receive €10.5 billion from the privatization of a 19.5% stake in Rosneft.

The head of state instructed to carry out a phased conversion of funds from privatization into rubles in order to avoid exchange rate fluctuations. "The President noted that in the coming days, a significant amount of foreign currency will enter the country, and in order to avoid any fluctuations in the exchange rate, it is necessary to provide for an appropriate phased conversion system," Peskov said.

"To this end, the president instructed Sechin to work out an appropriate conversion scheme with the government, the finance ministry and the Central Bank," the Russian leader's spokesman said.

Earlier on Wednesday, Rosneft had already informed about the completion of the placement of ten-year exchange-traded bonds for a total of 600 billion rubles.

The company's message said that the securities were placed in full by open subscription and paid for in a non-cash manner. At the same time, major transactions, as well as transactions in which the issuer would be interested, were not made during the placement of bonds.

At the beginning of this November, the Russian government published a directive, according to which Rosneftegaz must sell 19.5% of Rosneft's shares by December 5 for at least 710.847 billion rubles. No later than December 15, it is necessary to complete settlements with the buyer, and before December 31, the money received from the transaction must be transferred to the federal budget.

On Monday, December 5, it became known that Rosneft had collected applications for participation in the placement of its bonds in the amount of 600 billion rubles in half an hour, writes RBC. According to the publication's sources, the collection of investor proposals for 10-year NK securities took place without prior notification of potential buyers, applications were accepted from 17:00 to 17:30 Moscow time.

 

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