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Baar, Switzerland, 10 December 2016: Glencore and QIA have concluded various agreements which provide for the establishment of a 50:50 consortium (the Consortium).
The Consortium has entered into agreements in connection with the further privatisation of Rosneft whereby the Consortium will acquire from Rostneftegaz a 19.5% interest in the issued share capital of Rosneft (the Shares) for €10.2 billion (the Consideration). Under the proposed arrangements, Glencore will commit €300 million in equity (the Glencore Equity) and QIA will commit €2.5 billion in equity to the Consortium with the balance of the consideration for the acquisition of the Shares to be provided by non-recourse bank financing, principally by Intesa Sanpaolo S.pA., with Russian banks also providing financing and credit support.
The other material terms of the transaction for Glencore are:
The overall transaction, including the acquisition of the Shares, is conditional on the finalisation of all relevant financing, guarantee and other agreements and is expected to close in mid-December 2016.
Commenting on the transaction, Glencore CEO Ivan Glasenberg said: "We are delighted that the strong relationships that already exist between Rosneft, QIA and Glencore have enabled us to successfully enter into this transaction. Glencore looks forward to working with both parties to take advantage of the significant opportunities which are expected to be presented across the Russian and global oil markets."
The value of the gross assets the subject of the transaction attributable to Glencore (being 50% of the Consideration) is €5.1 billion. The profits attributable to the Shares, (being 9.75% (50% of 19.5%) of the net income attributable to shareholders of Rosneft), as shown in Rosneft's latest published audited accounts for the year ended 31 December 2015, are RUB34.6 billion (€510.6 million).
This transaction is not connected with the recently announced privatisation by the Russian government of Bashneft.In this announcement:
For the purposes of the penultimate paragraph of the text above: