Rosneft board approves $9.7bn in loans from new buy TNK-BP

City A.M. Reporter
ROSNEFT, Russia’s top crude producer, yesterday said its board had approved taking five-year loans from TNK-BP totalling up to $9.7bn (£6.3bn) as a way to tap free cash in the company it acquired last week.

The company also announced changes in its management team after completing the $55bn TNK-BP acquisition from BP and the AAR consortium of Soviet-born tycoons.

Rosneft, which had to borrow around $40bn to acquire TNK-BP, said in a regulatory filing yesterday that the board had approved loans of 152bn roubles and $4.8bn.

“Cash-pulling is a standard practice both at Rosneft and at the united company, which allows (it) to provide for effective management of free liquidity,” Rosneft said in emailed comments.

A Rosneft spokeswoman added that the loans amounted to the maximum of TNK-BP subsidiaries’ free cash that was approved by the board and that Rosneft may temporarily withdraw.