OAO Rosneft, Russia's state-run oil company, agreed to borrow $22 billion to buy assets in Russia and abroad, including those of bankrupt OAO Yukos Oil Co., once the nation's biggest oil producer.
OAO Rosneft agreed on the loans while preparing to bid for OAO Yukos refineries, oilfields and a 9.4% stake in Rosneft that will be auctioned off under bankruptcy proceedings, Moscow-based Rosneft said today in a statement. Yukos's total assets are worth $26.5 billion, according to Russian appraisers hired by the bankrupt company's court-appointed external manager. „Cash flow from acquired assets and the $10 billion that Rosneft expects to receive as a Yukos creditor may help smooth the impact of the borrowing on Rosneft's financials,” said Elena Anankina, an analyst at Standard & Poor's, by phone in Moscow.
President Vladimir Putin bolstered control of the nation's resource wealth over the past three years as state-run Rosneft and OAO Gazprom acquired assets from Yukos, which was crippled by more than $30 billion in tax claims. Former Yukos owner Mikhail Khodorkovsky, serving eight years in a Siberian penal colony for tax evasion and fraud, says he is being punished for opposing Putin. A Rosneft unit that is getting $9 billion of the credit commitment plans to bid for the 9.4% Rosneft stake that is being auctioned March 27 with a starting price of 195.5 billion rubles ($7.46 billion).
S&P is keeping its rating for Rosneft at 'BB+', one step below investment grade. „We are watching to see what assets it bids for, the price it pays, whether it sells the equity stake and how it refinances the loans,” Anankina said. The loans were organized by ABN Amro Holding BV, Barclays Plc, BNP Paribas SA, Calyon SA, Citibank, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley. They comprise a $13 billion facility due in 12 months and a $9 billion credit that matures in 18 months. The interest rates on both loans will be between 0.25 and 0.5 percentage point above money-market rates, lower than the 0.65 percentage-point premium
Rosneft is paying for $3.3 billion raised in April, 2006. The company's board approved the loans March 15. Rosneft said the credits are „unprecedented” for a Russian borrower in terms of size and cost. The company is borrowing at a lower rate than its larger, more highly rated rival, Gazprom. Moscow-based Gazprom, raising $2 billion of loans this month, is paying 40 basis points more than the London interbank offered rate on three-year loans and a 50 basis-point margin over five years. The so-called bridge loan for Rosneft is a private agreement with seven of its banks and is expected to be refinanced this year with longer-term loans and bonds that are set to pay higher margins, bankers said.
Rosneft is seeking to buy Yukos's refineries, which it uses to process oil from its largest unit, former Yukos subsidiary OAO Yuganskneftegaz. Yukos was the second-largest refiner in Russia after OAO Lukoil last year, processing 34 million tons of crude (249 million barrels) at its five plants. Yukos, once Russia's biggest oil producer, is now No. 7, after its output plunged to 430,000 barrels a day last year, down 75% from 2004. „We produce much more oil than we have capacity to refine, hence, we are interested in potential acquisitions of assets being sold in the Yukos bankruptcy auctions,” Rosneft CEO Sergei Bogdanchikov said in the statement. Rosneft has 263.7 billion rubles of court approved claims against Yukos, second only to the tax authorities, which are owed 392 billion rubles.
„The Yukos sales could end more than 15 years of oil and gas asset redistribution, from state to oligarch and back,” said Chris Weafer, chief strategist at Moscow-based Alfa Bank, by phone today. „Hopefully, this will lead to a new stage: the state will allocate known oil and gas resources to its champions, Gazprom and Rosneft, and development will finally start.” Rosneft bought Yugansk in 2004 after the government seized the unit from Yukos and sold it for $9.3 billion to pay off tax claims. Yukos's 9.4% stake in Rosneft is being auctioned in one lot along with promissory notes issued by Yugansk. State-owned OAO Gazprom and international companies such as Chevron Corp., Eni SpA and Enel SpA have also expressed interest in the assets. Rosneft and Gazprom may compete for some crude production and refining assets, as Gazprom seeks to expand its oil output. International companies will probably only bid with the state companies as they wouldn't want to cross the Russian government, said Andrei Gromadin, an analyst at MDM Bank in Moscow.
Gazprom is favored to win Yukos's 20% stake in Gazprom Neft, which will be auctioned April 4 in one lot with 100% stakes in natural-gas producers OAO Arcticgaz and ZAO Urengoil Inc. The starting price for the lot is 145 billion rubles. Bankruptcy auctions for Yukos's remaining oil production units, including OAO Tomskneft and OAO Samaraneftegaz, haven't been announced. (Bloomberg)