Glencore: Russian government announcement regarding privatisation of shares in Rosneft

Glencore notes the announcement released by the Russian government regarding the privatization of shares in Rosneft.

Glencore confirms that it is in final-stage negotiations regarding a transaction involving the acquisition, as part of a consortium with the Qatar Investment Authority (the Consortium), of a 19.5% interest in the issued share capital of Rosneft for €10.2 billion (the Shares).

Under the proposed arrangements, Glencore would commit €300 million in equity (the Glencore Equity) with the balance of the consideration for the acquisition of the Shares to be provided by QIA and by non-recourse bank financing.

The other material terms of the proposed transaction for Glencore are:

  • New 5 year offtake agreement with Rosneft representing a sizeable additional 220,000 bbls/day for the Glencore Marketing business.
  • Additional opportunities, through a strategic partnership for further cooperation, including infrastructure, logistics and global trading.
  • Other than the economic exposure represented by the Glencore Equity, (amounting to a c.0.54% indirect equity interest in Rosneft), Glencore would not have any economic exposure to its interests in the Shares.
  • Limited liability structure fully ring-fenced and non-recourse to Glencore apart from its €300 million equity contribution and the provision of certain guarantees, the risks of which would be fully indemnified by appropriate financial institutions.

Once the transaction is entered into, it will be conditional on the subsequent finalisation of all relevant financing, guarantee and other agreements and would be expected to close in mid-December.

A further announcement will be made in due course.

For further information please contact:

Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642
Carlos Francisco Fernandez t: +41 41 709 2369 m: +41 79 129 9195
Stefan Ogden t: +65 6415 7625 m: +65 9828 3700
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320
Pam Bell t: +44 20 7412 3471 m: +44 77 3031 9806
Company secretarial
John Burton t: +41 41 709 2619 m: +41 79 944 5434
Nicola Leigh t: +41 41 709 2755 m: +41 79 735 3916

Notes for Editors

Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. The Group’s operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities.

With a strong footprint in both established and emerging regions for natural resources, Glencore’s industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.

Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore’s companies employ around 160,000 people, including contractors.

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