Rosneft may use TNK-BP cash and loans to fund takeover

City A.M. Reporter
ROSNEFT may dig deeper into its pockets and raise funds from TNK-BP to help finance its $55bn (£34.3bn) 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, dated 23 November, that it may use its and TNK-BP’s existing cash – which totalled over $15bn at 30 September – 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 British oil major BP’s one-half stake for stock and $17.1bn in cash.

A source close to the deal told Reuters that Rosneft will hold roadshow for a dollar-denominated Eurobond early this week.

Rosneft’s offering is expected to be of benchmark size, meaning it would raise $500m or more.