Russian state bank lent billions to fund privatisation deal

Author: Agencies

MOSCOW: Russian state-owned bank VTB briefly lent over $11 billion to an entity controlled by Qatar and commodities trader Glencore four days after the Kremlin signed a deal to sell them a stake in state oil company Rosneft for a similar amount, two Russian newspapers reported on Tuesday.

The existence of the short-term loan, if confirmed, muddies the picture that Kremlin officials painted of the deal, as a successful transaction that showed foreign investors were hungry for Russian assets despite Moscow’s stand-off with the West.

Russian President Vladimir Putin, who trumpeted the sale late last year of the Rosneft stake as a major boost to the state budget, had previously said Russian state-run banks should not bankroll such transactions. Rosneft and VTB declined to comment on Tuesday on whether the lender had lent the money to the Qatar-Glencore joint venture. Glencore and the Qatari wealth fund, the Qatar Investment Authority, could not immediately be reached for comment.

Rosneft, in a statement, said that the financing of the deal was structured to avoid causing volatility on the Russian foreign exchange market.

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