Rosneft quiet on stake sale details
MORE than a month after Russia announced one of its biggest privatisations since the 1990s, selling a 19.5 percent stake in its giant oil company Rosneft, it still isn’t possible to determine from public records the full identities of those who bought it.
The stake was sold for €10.2 billion (R145.5bn) to a Singapore investment vehicle that Rosneft said was a 50/50 joint venture between Qatar and Glencore.
Unveiling the deal at a meeting with Rosneft’s boss Igor Sechin on December 7, President Vladimir Putin called it a sign of international faith in Russia, despite US and EU financial sanctions on Russian firms.
“It is the largest privatisation deal, the largest sale and acquisition in the global oil and gas sector in 2016,” Putin said.
It is one of the biggest such deals since the early postSoviet years, when allies of former president Boris Yeltsin took control of state firms and became billionaires overnight.
Details missing But important facts about the deal either have not been disclosed, cannot be determined solely from public records, or appear to contradict the straightforward official account of the stake being split equally by Glencore and the Qataris.
For one: Glencore contributed only €300 million of equity to the deal, less than 3 percent of the purchase price, which it said on December 10 had bought it an “indirect equity interest” limited to just 0.54 percent of Rosneft.
Public records show the ownership structure of the stake ultimately includes a Cayman Islands company, whose owners cannot be traced.
And while Italian bank Intesa SanPaolo lent the Singapore vehicle €5.2bn to fund the deal, and Qatar put in €2.5bn, the sources of funding for nearly a quarter of the purchase price have not been disclosed by any of the parties.
“The main question in relation to this transaction, as ever, still sounds like this: Who is the real buyer of a 19.5 percent stake in Rosneft?” Sergey Aleksashenko, a former deputy head of Russia’s central bank, wrote in a blog last week.
Glencore would not comment on the identity of the Cayman Islands firm or further explain how ownership of the 19.5 percent stake was divided.
The Qatari Investment Authority said it would not comment on the deal, beyond confirming that it had participated in it.
Rosneft and the Kremlin declined to respond to questions.
Like many large deals, the Rosneft privatisation uses a structure of shell companies owning shell companies, commonly referred to in Russia as a “matryoshka”, after the wooden nesting dolls that open to reveal a smaller doll inside.
Following the trail of ownership leads to a Glencore UK subsidiary and a company that shares addresses with the Qatari Investment Authority, but also to a firm registered in the Cayman Islands, which does not require companies to record publicly who owns them. The Singapore-registered investment vehicle that holds the stake in Rosneft is called QHG Shares. It is owned by a UK-registered limited liability partnership, QHG Investments, which in turn lists as one of its two owners another UK-registered limited liability partnership, QHG Holding, created on December 5.