Sources: Rosneft Seeks $32.5B Loan from International Banks in TNK-BP Buy

OAO Rosneft has asked international banks to commit to a $32.5 billion loan to back its $55 billion acquisition of oil company TNK-BP Holding from the joint venture owners BP PLC and a group of Soviet-born billionaires, with up $24.5 billion to be refinanced in the bond market, two people familiar with the deal said Wednesday.

Banks have received the broad outline of a financing structure from Rosneft to fund the entire acquisition of TNK-BP, these people said. The deal includes a $24.5 billion bridge loan that will be refinanced in the bond market, with the bridge comprising a one-year loan with a one-year extension option. The remainder comprises an $8 billion five-year loan, the people said.

Rosneft has invited more than 15 international banks into the deal but about 14 or 15 banks are expected to provide the $32.5 billion loan, said the first person.

International lenders are due to commit to the financing by early next week, the second person said.

In addition, Rosneft is arranging up to $5 billion in loans from Russian banks, bringing the total financing to $37.5 billion, the second person said. Rosneft needs to raise $45 billion in cash to finance the acquisition and is paying for the remaining $10 billion in shares.

The remaining $7.5 billion is likely to be financed through Rosneft's own cash resources and potentially that of TNK-BP's. Rosneft is planning to close the purchase through two stages. The first of these is a deal with BP that is more advanced than a second agreement with the billionaires, known as the AAR consortium, who own the other half of the company.

Rosneft has been reticent about how it would fund the entire acquisition of TNK-BP but a financing arrangement looks close to being finalized.

Copyright (c) 2012 Dow Jones & Company, Inc.


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