OAO Rosneft (ROSN) asked the state for as much as 1.5 trillion rubles ($42 billion) of aid, a government official said, signaling a U.S. ban on long-term loans to Russia’s largest company is starting to bite.
The state-run producer, which pumps 40 percent of Russia’s oil, wants as much as 1.5 trillion rubles, a government official said by phone, asking not to be identified because the issue isn’t public.
Rosneft is due to repay $12 billion by the end of the year, including loans to finance last year’s acquisition of competitor TNK-BP, according to a company presentation.
The request shows Russia’s largest companies are exploring ways to replace foreign finance after the U.S. banned American banks from lending to certain borrowers, including Rosneft, for maturities greater than 90 days.
The measure caused a wider credit freeze, and no Russian companies received loans in U.S. dollars, Swiss francs or euros last month, according to data compiled by Bloomberg.
Rosneft Chief Executive Officer Igor Sechin wrote to the government outlining five proposals to strengthen the company’s financial and operating position, Vedomosti reported earlier today, citing officials it didn’t identify.
The most expensive option is to buy back as much as 1.5 trillion rubles of bonds to replace foreign debt, for instance, using money from National Wellbeing Fund, the report said.
The proposal to get that much cash is unrealistic, the government official said, because it would drain too much from state funds. Rosneft’s press service declined to comment.
Rosneft was added to a list of companies under the U.S. sanctions on July 16, triggered by the conflict in Ukraine. The U.S. previously froze Sechin’s assets and issued a visa ban on him.
The company hasn’t changed its investment plans because of the sanctions, Svyatoslav Slavinskiy, Vice President for Finance, said at a conference call last month.
bloomberg.com
The state-run producer, which pumps 40 percent of Russia’s oil, wants as much as 1.5 trillion rubles, a government official said by phone, asking not to be identified because the issue isn’t public.
Rosneft is due to repay $12 billion by the end of the year, including loans to finance last year’s acquisition of competitor TNK-BP, according to a company presentation.
The request shows Russia’s largest companies are exploring ways to replace foreign finance after the U.S. banned American banks from lending to certain borrowers, including Rosneft, for maturities greater than 90 days.
The measure caused a wider credit freeze, and no Russian companies received loans in U.S. dollars, Swiss francs or euros last month, according to data compiled by Bloomberg.
Rosneft Chief Executive Officer Igor Sechin wrote to the government outlining five proposals to strengthen the company’s financial and operating position, Vedomosti reported earlier today, citing officials it didn’t identify.
The most expensive option is to buy back as much as 1.5 trillion rubles of bonds to replace foreign debt, for instance, using money from National Wellbeing Fund, the report said.
The proposal to get that much cash is unrealistic, the government official said, because it would drain too much from state funds. Rosneft’s press service declined to comment.
Rosneft was added to a list of companies under the U.S. sanctions on July 16, triggered by the conflict in Ukraine. The U.S. previously froze Sechin’s assets and issued a visa ban on him.
The company hasn’t changed its investment plans because of the sanctions, Svyatoslav Slavinskiy, Vice President for Finance, said at a conference call last month.
bloomberg.com
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