Who bought 19 5 Rosneft shares. And $2 billion is not a pity
The Kremlin has announced the completion of the biggest deal this year, the sale of a 19.5% stake in Rosneft for 10.5 billion euros. The buyers were the oil trader Glencore and the Qatar sovereign wealth fund, their consortium will share the purchased package. “The biggest deal on the global energy market in 2016,” as President Vladimir Putin called it, came as a surprise to everyone - Rosneft almost missed the deadline set by the government and even prepared a fallback in case investors could not be found. Much about the structure of the deal and its implications is still unclear.
"Last minute"
At the beginning of the month, nothing was known about the upcoming deal, presidential aide Andrei Belousov even wrote a letter to the head of Rosneft, Igor Sechin, asking him to decide. And RBC sources told about Sechin's trips abroad in search of buyers.
Sechin and the Rosneft team have indeed been actively traveling abroad in recent weeks in search of investors, a source close to the company told Dozhd. But mostly it was about Asian countries: China and Japan.
In parallel, Rosneft, having placed bonds, borrowed 600 billion rubles on the market. This was a safety net in case investors could not be found, a source told Reuters. As a result, the company managed to conclude a deal "at the last minute," the agency writes.
According to the directive issued by the government, the company had to sell 19.5% of the shares before December 5, before December 15, the buyer must make settlements with the formal seller - the state company Rosneftegaz (through which the state owns Rosneft), and until December 31, the money must to enter the budget - at least 710.8 billion rubles. Now the state stake has been sold for 719 billion rubles (at the rate of the Central Bank on December 8).
The deal has not yet been formally closed, according to a Glencore press release dated Dec. 7: The companies are in the final stages of negotiations.
“He (Sechin. - Rain) killed two birds with one stone,” a senior Reuters source commented on the deal. The deal will further strengthen Sechin's position in power, the agency writes.
“The Kremlin had nothing to do with the preparatory work. President Putin also did not have any contacts on the deal, ”Presidential Press Secretary Dmitry Peskov said. Igor Sechin and his team were personally involved in the preparation for the deal, he added.
What does the deal look like
Glencore and the Qatari fund have created a consortium, which is owned on a parity basis. To purchase the state-owned stake in Rosneft, the association attracted a loan from one of the European banks, Sechin told Putin. According to the Financial Times, this is the Italian bank Intensa Sanpaolo. Glencore 300 million euros own funds, the company said, which corresponds to 0.54% in Rosneft, but will not participate in economic activity companies. The rest of the deal will be financed with Qatari fund money and bank financing.
In addition to the Glencore consortium and the Qatari fund, 50% plus three shares of the company are still owned by the state through Rosneftegaz, and 19.75% by BP. According to Sechin, the concluded deal is strategic, it includes the conclusion of a long-term supply contract with Glencore, the creation of a special mining enterprise together with a consortium both in Russia and abroad.
Who bought Rosneft
According to Forbes, Swiss Glencore is one of the largest sellers of Russian oil. The deal will be an "amazing comeback" for the company after financial problems last year, writes Bloomberg. As part of the deal, Glencore will also enter into a new five-year agreement with Rosneft to buy from Russian company 220 thousand barrels of oil per day - this corresponds to about 20 billion dollars in five years (at a price of 50 dollars per barrel).
Ivan Glasenberg, Executive Director of Glencore International. Photo: Reuters
Glencore already has a contract with Rosneft: the company will supply the trader with 46.9 million tons of oil from 2013 to 2017 (190 thousand barrels per day). The trader also owns 8.8% of the metallurgical holding UC Rusal, 26% of the Russneft oil company, the Moscow Grain Company (MZK) and a grain terminal on the Sea of Azov. The company controls agricultural land in the Stavropol Territory and the Kuban, Vedomosti writes.
Participation in the deal by Qatar is a rare example of an OPEC member country's investment in Russia's oil business, but the fund has not yet commented on the deal, nor is it known on what terms it took part in the purchase.
What will happen to the ruble
After Sechin reported to Putin about the sale, the president called for the development of a scheme for transferring funds to the budget. The company, together with the Ministry of Finance and the Central Bank, will have to develop a scheme for converting the received currency in order to avoid sharp fluctuations in the ruble, Putin said.
Putin spoke about the danger of excessive strengthening of the ruble back in July, Bloomberg analysts also wrote that excessive strengthening of the ruble national currency bad effect on Russian economy. There are no particular risks for the foreign exchange market right now, says Sergey Khestanov, macroeconomic adviser CEO DB "Opening". This deal fits well with the Central Bank's policy of increasing foreign exchange reserves, and the regulator is likely to buy back a significant portion of the currency received, the economist said.
At the opening of the Moscow Exchange, Rosneft shares rose by 6%, hitting a new all-time high.
Photo: Sergey Guneev / RIA Novosti
Daniil Sotnikov
In itself, the deal to sell a large stake in Rosneft to a consortium consisting of the Glencore group of companies and the Qatari investment fund, took place almost in the spirit of a military special operation. I. actually, the reputation of both the buyer and the seller, this is quite consistent.
Everything here is very funny.
Glencore International AG, is an abbreviation for Gl obal En energy co modities and Re sources, (intranslation into Russian "Global Energy Commodities and Resources") is primarily a trading structure, and with a very peculiar charisma. The fact is that this is a Swiss trading company, one of the world's largest suppliers of raw materials and rare earth materials. The company was originally built on the principles of secrecy, high-risk and aggressive policy. She traded Iranian oil in circumvention of the embargo, cooperated with Cuba and Libya, worked with South Africa at a time when apartheid was there, and this, to put it mildly, was not welcomed. By the way, it remained the only company that supplied grain to the Soviet Union, despite the international ban due to the war in Afghanistan. In 1983, the founders of the company, US citizens Rich and Green, were formally charged (by the way, the notorious Rudolfo Giuliani), and they were forced to first flee the country (one took Spanish citizenship, the other Bolivian at all), and then retire altogether so as not to harm your offspring. An interesting detail, it was they who laid down the tradition: only those who work in it can own Glencore shares, retired - sell. Igor Ivanovich Sechin should understand this, and even, somewhere, probably close.
In a word, the guys, to put it mildly, are not easy.
What is absolutely certain here is that there will definitely be no “politics” when working with Glencore, as well as no “political influence” - in completely old American traditions, there is nothing personal and political here, only business.
Rosneft, while retaining a controlling stake in the Russian state, receives here not only money, although money too. It receives a virtually guaranteed sales market, and without a market margin (or with a minimum). The income of traders is already embedded within the ownership structure of Rosneft itself, which, at the same time, becomes perhaps the most “golden” asset of a large trading company.
The Kremlin is confident that the deadline for receipt of funds from the privatization of 19.5% of Rosneft's shares - by December 15 - will be met. All the nuances of this process have already been agreed with both the government and Russian President Vladimir Putin.
The budget from the privatization of Rosneft will receive €10.5 billion. The President of the Russian Federation instructed the government and the Central Bank of Russia to carry out a phased conversion of funds from the privatization of Rosneft into rubles in such a way as to avoid exchange rate fluctuations.
The sale of the Rosneft stake is taking place amid a certain increase in the value of the company (at the beginning of the year, the entire company was valued at $36 billion) and is intended to replenish the state budget.
It should be noted that the "Putin-type" privatization - with the preservation of state control over companies and a number of stringent requirements in relation to acquirers (in particular, their provision of a coherent development plan for the companies they belong to) is traditionally criticized by supporters of market liberalism as "fake".
True privatization, they note, "continues to be a utopia."
Photo: kremlin.ru
The head of Rosneft, Igor Sechin, reported to Russian President Vladimir Putin on the completion of the deal to privatize Rosneft. 19.5% of its shares were bought by a consortium of Glencore companies and the sovereign wealth fund of Qatar. The deal amounted to 10.5 billion euros, the money will go to the budget of the Russian Federation. According to Sechin, the consortium members received equal shares as part of the privatization. Putin called the deal "the largest on the global energy market in 2016." The President also stressed that the controlling stake in Rosneft would remain in the hands of the state.
The scheme of financing from the trader will be as follows. He will invest €300 million of his own funds, as well as provide guarantees to a structure completely "fenced" from the Glencore business, which will have to attract the bulk of the necessary financing from banks. If Glencore gets half of Rosneft's stake, it will need €4.8 billion in debt financing to complete the deal. As the trader emphasizes, his participation in the transaction depends on the attraction of this financing, which, if successful, can take place in mid-December.For its part, Glencore will receive an offtake contract to buy oil from Rosneft for five years with an annual volume of 220 thousand barrels per day (11 million tons). In addition, the trader and Rosneft are going to develop a strategic partnership in infrastructure projects, logistics and global trading.
Thus, as "Kommersant" suggested, Glencore did not take himself too high risks on this deal and, apparently, was attracted to it at the last moment. At the same time, the trader's assessment of the transaction at €10.2 billion raises the question of how such a sale meets the criteria of the directive issued earlier by the government, in which the minimum price for Rosneft's stake was set at 710.8 billion rubles. At the rate of the Central Bank on December 8, the volume of the transaction corresponds to 698.7 billion rubles. The head of Rosneft, Igor Sechin, noted that the transaction was carried out at exchange quotations on December 6 - at that time, the transaction amount, at the Central Bank rate on December 7, was 700.6 billion rubles.
Finance Minister Anton Siluanov, commenting on the deal, said that about 700 billion rubles would go to the 2016 budget, as expected. "This money will allow us not to raise funds Reserve Fund- said the head of the Ministry of Finance. - Money, obviously, will arrive, we will use this money. Therefore, everything that we planned in the budget in terms of obtaining privatization money, we will do everything, we will get everything."
Head of the Federal antimonopoly service Igor Artemiev said that the deal to buy a 19.5% stake in Rosneft is perfectly legal. According to Peskov, "the Kremlin had nothing to do with the preparatory work," and "President Putin had no contacts on the deal either." "Sechin and his team were personally involved in the preparations, which he actually reported to the president yesterday," Peskov said.
After the announcement of the results of the privatization deal, Rosneft shares hit a new all-time high and immediately went up by 6%.
The Italian bank Intesa will become the true source of financing for the privatization of Rosneft, and with it the federal budget of the Russian Federation, which will provide the bulk of the funds, Reuters reports citing sources.The bank has a long history of cooperation with Rosneft and has been looking for applicants for its shares since the beginning of the year.
The involvement of Glencore and the Qatari fund looks like a "cover" to the deal, a market source told finanz. The scheme may look like this, he suggests: a company (Rosneft) places bonds and invests money in a certain fund, which then buys its own shares, receiving a commission for this - similar mechanisms were used during the privatization of the 1990s, when money was paid for the purchase of companies from the same companies.
Rosneft was able to get foreign currency from the West, and the federal budget deficit, with the help of an Italian bank, was essentially financed by the ECB,” another market source told finanz.
finanz.ru
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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
Rosneft Chief Executive Officer 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 company Glencore and the sovereign Qatar Investment Authority (as of June, it had $335 billion under management). “I hope that their arrival in the governing bodies will improve corporate procedures, transparency of the company and, accordingly, will ultimately lead to an increase in capitalization,” the President noted. 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 (representatives of big business are usually invited there), one of RBC's interlocutors said.
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 was not previously 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 OPEC member Qatar, there may now be new projects in the Russian oil industry after this deal. This is indeed the largest deal in the global energy market, notes Anton Usov, a KPMG partner in Russia. There was a real privatization, the arrival 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 most secure scheme for the financial market to convert €10.5 billion from the sale of a 19.5% stake in Rosneft to be credited to federal budget. “The financial market will now receive a significant volume foreign exchange, the money should go to the budget in ruble equivalent, so we need to develop a scheme that would not negatively affect the market, would not cause any jumps in 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
, 12.12.16, Moscow, 09:57 Last week, Igor Ivanovich Sechin surprised everyone again: on Thursday, like a bolt from the blue: it was announced that 19.5% of Rosneft's shares had been sold - and not to Rosneft itself, as many market participants assumed, but to Qatar's sovereign wealth fund and the world's largest trader Glencore.
Everything related to Rosneft recent times more reminiscent of lightning-fast special operations than Western mergers & aquisitions. In the West, Sun Tzu's "The Art of War" is popular among investment bankers, and sometimes it seems that they take the thesis "business is war" literally.
Once! - sat under house arrest Yevtushenkov; once! - and suddenly they announced the sale of Bashneft to Rosneft, time! - and detained the head of the Ministry of Economy Ulyukaev.
Actually, it is now clear why Ulyukaev was detained. After such a loss of a fighter, the economic bloc of the government hardly dared to ask any questions about the deal.
True, instead of the economic bloc Russian government they are likely to be asked by the United States: White House Press Secretary Josh Ernst said the US Treasury would look into the deal. This statement, apparently, had such an effect on Glencore that he immediately issued a press release in which he clarified that the agreement with Rosneft had not yet been signed, but was at the "last stage of negotiations." In addition, Glencore clarified that out of a total $10.2 billion deal, it is only putting up $300 million of its own money (corresponding to a 0.54% stake) in exchange for a five-year agreement that gives Glencore access to $220,000 barrels of oil daily.
First, they took away from Yevtushenkov. Then it was suddenly sold to Rosneft. The victory of "Rosneft" was explained by the need to replenish the budget, and offered the most: 330 billion rubles.
It was a strange explanation, because it is a state-owned company. And the payment of such a large amount is reflected in financial condition any company. In particular, dividends paid to the state are reduced by this amount, not to mention taxes. That is, if money from a state-owned company migrated to the state budget, this does not mean that the amount has changed.
In parallel with Bashneft, the state was going to sell 19.5% of Rosneft. These deals went hand in hand. The main reason for this sale was the desire to replenish the budget.
This reason looked strange in a country that had buried $15 billion into the ground for the construction of South Stream even before the agreement on it was signed. In addition, it is under sanctions, and this greatly affects its value. It was completely incomprehensible why the Kremlin was so eager to sell the state-owned 19.5% of Rosneft into private hands in such an unfavorable situation. And this week it all became clear.
On Wednesday, it placed on the market bonds for 600 billion rubles. - that is, for most of the amount that had to be paid for 19.5%. Exactly the day after this placement, Igor Sechin came to Putin and announced that he had two buyers for 19.5% of Rosneft - Glencore and Qatar.
Both of these globally respected organizations have in common that they are not transparent.
Simply put, they - within the framework of a legally completely impeccable scheme and, of course, with full observance of financial politeness - can act as frontiers in exchange for certain services: for example, in exchange for an oil supply contract.
All that we know, in the bottom line, boils down to the following.
That for some reason the Kremlin was in a hurry to sell Rosneft, and then sell 19.5% of Rosneft into private hands.
That the motivation put forward - to receive $15 billion to the budget, given the insignificant size of this amount compared to at least spending on the Olympics ($50 billion) and the scope of budget theft, does not seem logical.
Which exactly on the eve of the announcement of the sale took 600 billion rubles. What is the size of this loan for Russian market is huge and that the loan was conducted by closed subscription and was placed in half an hour.
That Glencore said it was investing only $300 million in the deal.
That the rest of the money is provided by the Italian bank Intesa Sanpaolo, a longtime partner of Gazprombank, a collector of Russian icons and, in general, a great friend of the Kremlin, whom you can rely on in all sorts of sensitive issues.
That 300 million dollars plus 600 billion rubles. just correspond to approximately the amount that must be paid for a 19.5% stake in Rosneft.
That we are waging a proxy war with Qatar (and Saudi Arabia) in Syria, because the real sponsors of the Syrian opposition are by no means the United States and Europe, but Turkey, Qatar and Saudi Arabia.
There are a thousand and one ways in the world to pay for the shares of a state company with the money of the state company itself, but in such a way that the shares go to a private person. For example: a company places bonds, invests the money received in a certain fund, and this fund is then fronted by an influential but non-transparent international corporation.
So the question is very simple: who is actually being sold 19.5% of Rosneft shares in front of everyone right after