By Andrey Ostroukh
MOSCOW--Oil giant OAO Rosneft said on Monday it paid back $7
billion of a bridge loan it had taken to acquire TNK-BP, the
largest foreign debt repayment by a Russian company since Western
sanctions were imposed.
Rosneft bought TNK-BP in the first half of 2013 for some $55
billion, becoming the world's largest listed oil producer by
output. So far this year, Rosneft has repaid around $25 billion of
its foreign debt, the company said.
The Russian oil giant's net debt stood at 1.77 trillion rubles
($31.08 billion) by the end of the third quarter of 2014.
After Western sanctions effectively cut off Russian companies
from global capital markets earlier this year, Rosneft asked the
government for 1.5 trillion rubles ($25.97 billion) in state aid in
August, saying it needed the money to weather sanctions.
However, Moscow decided against providing aid to Rosneft from
the National Welfare Fund, designed to support the pension system,
as was initially expected. But Rosneft, Russia's most indebted
company to be hit by sanctions, raised 625 billion rubles from the
Russian bond market on Dec. 12, just one working day before the
Bank of Russia jacked up its key interest rate by 6.5 percentage
points to 17% in an effort to support the ruble and rein in
inflation.
Rosneft confirmed it won't use the rubles it raised from the
debt market to buy in foreign currencies.
"The company has no need to tap the currency market for
servicing its debts as it generates enough of revenue in foreign
currency," Rosneft chairman Igor Sechin said.
Mr. Sechin said that his company sells part of its revenue in
foreign currencies, which has "a positive impact on the domestic
currency market."
Last week, President Vladimir Putin said he had personally
contacted major companies to convince them to sell hard currencies
on the market to ease pressure on the battered ruble.
Mr. Sechin also said that if Rosneft eventually were to receive
money from the National Welfare Fund, it would spend it on
strategically important projects in Russia.
Analysts saw the bond sale by Rosneft as an alternative to a
capital raising, as the company, sanctioned by the West for
Moscow's annexation of Crimea and support of separatist rebels in
Ukraine, is cut off from the international capital markets.
Large bond placements were popular in Russia during the
2008-2009 financial crisis, when indebted companies issued bonds to
subsidiary banks, which in turn used them as a collateral against
the central bank's loans.
Write to Andrey Ostroukh at andrey.ostroukh@wsj.com
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