Cashed up Rosneft ready for Yukos auction

Russian oil major Rosneft has secured $US 22 BLN in loans to finance the potential acquisition of Yukos' assets in the upcoming auction. Rosneft's main goal is to buy back its own shares from Yukos.

The company has sought clearance from Russia's Federal Antimonopoly Service to buy a billion of the shares – around 9.5% of Rosneft's charter capital.

The initial price for the stake is $US 7.5 BLN.

But Rosneft won't be bidding directly – it's created a subsidiary called Razvitie to bid on its behalf. That would minimise the risk if the outcome of the auction is contested.  Were that to happen, the subsidiary would shoulder all responsibility, leaving Rosneft in the clear, say analysts.

They add that being heavily indebted won't pose a problem for Rosneft, because it's a state company.

“Rosneft has taken on the purpose of buying out its own shares. There are several ways it could be refinanced or even repaid. It could sell off Yukos assets, which could be bought up apart from the Rosneft shares, production assets such as Samaraneftegaz and Tomskneftegaz; convertible bonds could be issued or they could be sold off to the market or to the strategic investors. That way they could refinance the debt or even clear it,” Anton Lushnikov, analyst at Metropol Investment Company in Moscow mentioned.