Russian state bank secretly financed Rosneft sale after foreign buyers balked

A Reuters investigation cites nine sources with knowledge of the sale of a 19.5 percent stake in oil giant Rosneft in reporting Russian state-owned bank VTB financed a large share of the transaction. In Dec. 2016, Rosneft announced an approximately $11.5 billion privatization deal in which a 19.5 percent stake in the company was supposedly sold to Qatar’s sovereign wealth fund and giant commodity trader Glencore. The aim of the deal was to raise funds for the depleted Russian state budget and show that Moscow was not isolated and that it could still raise foreign capital. Yet, the supposed privatization deal has since evolved with major players, like Italian lender Intesa Sanpaolo, pulling out of it. Intesa Sanpaolo was supposed to provide more than 5 billion euros in financing, but did not do so, due at least in part to complications stemming from western sanctions on Moscow. The Reuters investigation finds it was actually VTB that loaned the Qatari sovereign wealth fund about $6 billion, and VTB possibly raised the majority of those funds from Russia’s central bank. Hence, not much of a privatization occurred.


Read original source.