The final structure of Rosneft's shareholders has been formed, "Igor Sechin, chief executive officer of Rosneft, said on September 8, Rossiya's 24th television channel. The consortium of the Swiss trader Glencore and the Qatar Investment Fund (QIA) - QHG Oil, which bought 19.5% of Rosneft at the beginning of the year, intends to sell a 14.16% stake in China's CEFC China Energy, sellers said.
CEFC will pay $ 9.1 billion (7.5 billion euros), say two sources close to different parties to the transaction. The package is sold without a debt, one of them knows. The amount of the transaction implies a premium of 16-16.1% to the current quotes. When the deal must close, the parties do not report - this is the subject of "final negotiations and approval of regulators". CEFC reports that the company has already received approval from the Commission for National Development and Reform of China.
In the winter of 2017, QIA and Glencore paid 962 billion rubles, or 10.2 billion euros, for 19.5% of Rosneft. If the deal with CEFC is closed at the announced price, the former owners will earn 100 million euros for a purchase and sale of Rosneft shares. Following the results of 2016, QHG Oil also received dividends from Rosneft for 174 million euros (at the exchange rate on the last day of payments), another 116 million consortium can receive if the shareholder register for dividends payment for the first half of 2017 closes earlier than deal.
After the transaction, CEFC will become the third largest shareholder of Rosneft after the state company Rosneftegaz (50% plus 1 share) and BP (19.75%). Under the control of QIA will remain 4.7%, Glencore - 0.5%.
What determines the premium, the parties do not say. It is unclear why CEFC agreed to pay it, notes the manager of GL Asset Management Sergey Vakhrameev. The prize is for control.
In the US, for example, it ranges from 15 to 50% depending on the type of business. But in this case there is not only control, but also the opportunity to significantly influence the management of the company, even if the representative from CEFC will join the board of directors. Even stranger is the deal, given that QHG Oil bought its stake with a 5% discount to the price at the time of purchase, Vahrameyev said.
Without premiums and without paying dividends, the loss of QIA and Glencore would be about 900 million euros, since Rosneft has fallen in price by a quarter since December. Meanwhile, the consortium bought the stake in Rosneft almost entirely with borrowed money. Glencore spent only 300 million euros, QIA - 2.5 billion euros, and the rest was attracted to banks. Most of the loan was given by the Italian Intesa Sanpaolo (5.2 billion euros).
"Recently, volatility in financial markets has led to a serious devaluation of the dollar against the euro (the dollar-to-euro rate has fallen by 13.5% since the beginning of the year), and the costs of servicing this loan have become quite serious," explained deal Sechin. "In this regard, the consortium QIA and Glencore decided to find an additional partner to ensure direct ownership of these shares without a credit burden."
The fact that QHG Oil was not the last owner of Rosneft's 19.5% was understandable from the very beginning, says Aton analyst Alexander Kornilov. A large leverage, which would be difficult to pay off with current dividends, originally implied the arrival of the third investor with his money, the expert said.
Who is the CEFC and what will it get?
Back in June 2016, Chinese CNPC and Sinopec "expressed interest" in the privatization of the share of Rosneft. Negotiations with CNPC lasted until December 2016, but as a result, the parties did not agree, the expectations of the Chinese company were too high, Vedomosti's interlocutor, close to one of the parties to the process, knows. In negotiations to buy a stake in Rosneft, the Chinese CEFC China Energy entered only in the spring of this year, he notes.
CEFC China Energy was founded in 2002, according to the company's website. Initially, the company was engaged in oil trading, later grew into one of the largest private companies in China. Her specialization is energy, investments in oil and gas sectors of different countries, as well as in futures, buying up debts and providing leasing, factoring services, writes Bloomberg. The annual revenue of the CEFC is $ 40 billion, the company said.
Rosneft has already signed a five-year contract with CEFC for the supply of oil, Sechin told Russia 24, and an agreement that involves the development of partnerships for projects in Eastern Siberia and petrochemicals. In addition, CEFC was able to enter the retail business of Rosneft, a memorandum that the companies signed in early summer. Are there any additional conditions for cooperation between Rosneft and CEFC, for example, a contract for the purchase of oil, Sechin did not say, and company representatives did not comment.
As new arrangements correlate with deliveries to CNPC, it is not specified, but, according to Sechin, Rosneft will maintain close cooperation with its former partners. "We can not exclude that the current scheme of shareholders is not the last option. The Qatari fund is exactly a portfolio investor, so in theory it can sell its shares to a third party, Glencore is also interested in this investment and is unlikely to reduce its stake in the near future, "Kornilov said.
Representatives of Glencore and Rosneft declined to comment, it was not possible to contact the representative of QIA.