Rosneft may dig deeper into its pockets and raise funds from TNK-BP to help finance its $55bn (£34bn) takeover of the Anglo-Russian oil firm that will make it the world’s largest listed oil firm by output.
Rosneft said in a Eurobond prospectus that it may use its and TNK-BP’s existing cash – which totalled over $15bn (£9bn) at September 30 – to fund the deal in combination with borrowings from banks.
It was not clear how exactly state-controlled Rosneft would rely on TNK-BP to finance the deal – some analysts say the joint venture may eventually pay a special dividend or loan funds to Rosneft to help complete the deal.
Rosneft needs $45bn in cash to fund its two-stage takeover of TNK-BP. In the first leg, which has already received Russian government and board approval, it will buy out oil major BP’s one-half stake for stock and $17.1bn in cash. BP would plough back $4.8bn of proceeds into buying Rosneft shares from the Russian state, ending up with a stake of nearly 20 per cent.
In the second step, Rosneft would pay $28bn in cash to buy the rest of TNK-BP from AAR, a consortium that represents billionaire shareholders Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik.
Rosneft also said in the prospectus that it has received a commitment from a syndicate of international banks to lend around $30bn, including up to $7.5bn in long-term financing, to fund the takeover. It was earlier reported that Rosneft was receiving initial commitments of $32.5bn in takeover finance from banks.