BP PLC (BP.) - BP SIGNS RUSSIAN AGREEMENTS
RNS Number : 8317R
22 November 2012
22 November 2012
BP, Rosneft and Rosneftegaz sign definitive agreements
relating to the sale of BP's interest in TNK-BP
and BP's investment in Rosneft
BP, Rosneft and Rosneftegaz -- the state-owned parent company of Rosneft --
have signed definitive and binding sale and purchase agreements (SPAs) for the
sale of BP's 50 per cent interest in TNK-BP to Rosneft and BP's investment in
Rosneft. BP and Rosneft agreed heads of terms for this transaction on October
The SPAs were signed after the Russian Government approved BP's purchase from
Rosneftegaz of a 5.66 per cent stake in Rosneft for $4.8 billion, as an
integral part of the transaction.
On completion, the net result of the overall transaction will be that BP will
receive $12.3 billion in cash and acquire an 18.5 per cent stake in Rosneft
for its stake in TNK-BP. When combined with BP's current 1.25 per cent
shareholding, this will result in BP owning 19.75 per cent of Rosneft.
Completion of the transaction is subject to certain customary closing
conditions, including governmental, regulatory and anti-trust approvals. The
two companies still anticipate completion in the first half of 2013.
An agreement last week between BP and AAR, the other shareholder in TNK-BP,
lifted restrictions on BP's ability to engage with Rosneft before completion.
BP and Rosneft have now begun discussions on how BP can best support Rosneft's
strategic priorities, both as an investor and a strategic partner.
Notes to editors:
· Under the terms of the SPAs, the proposed transaction consists of two
tranches, intended to complete on the same day:
- BP will sell its 50 per cent shareholding in TNK-BP to Rosneft for $17.1
billion in cash and shares representing a 12.84 per cent stake in Rosneft;
- BP will then use $4.8 billion of these cash proceeds to purchase an
additional 5.66 per cent stake in Rosneft from the Russian Government.
· With a holding of 19.75 per cent of Rosneft stock, BP expects to be able
to account for its share of Rosneft's earnings, production and reserves on an
equity basis. In addition BP expects to have two seats on Rosneft's nine
person main board.
· The proposed sale of the TNK-BP shareholding to Rosneft consists of a
cash element of $17.1 billion and 1,360,449,797 Rosneft shares. Shares in
Rosneft traded at close of business on the bid date (18 October 2012) at $7.13
and at close of business on 21 November 2012 at $7.98 (source: London Stock
· For further information please see the announcement issued by BP on 22
October, 2012 ("BP Agrees Heads of Terms to Sell Its TNK-BP Shareholding to
BP press office London: +44 (0)20 7496 4076, firstname.lastname@example.org
This release contains certain forward-looking statements, including statements
regarding the expected timing of completion of the transaction described,
expectations regarding the accounting treatment of BP's expected share of
Rosneft's earnings, production and reserves, prospects for BP's level of
representation on Rosneft's board of directors and other statements which are
generally, but not always, identified by the use of words such as 'want',
'intended to', 'expected to', and similar expressions. Forward-looking
statements involve risks and uncertainties because they depend on
circumstances that will or may occur in the future. Actual results may differ
materially from those expressed in such statements, depending on a variety of
factors, including the actions of regulators and the timing of the receipt of
governmental and regulatory approvals, the availability of other attractive
investment opportunities, the timing of bringing new fields onstream, future
levels of industry product supply, demand and pricing, OPEC quota
restrictions, operational problems, general economic conditions, political
stability and economic growth in relevant areas of the world, changes in laws
and governmental regulations, regulatory or legal actions including the types
of enforcement action pursued and the nature of remedies sought, exchange rate
fluctuations, development and use of new technology, the success or otherwise
of partnering, the actions of competitors, trading partners, creditors, rating
agencies and others, natural disasters and adverse weather conditions, changes
in public expectations and other changes to business conditions, wars and acts
of terrorism or sabotage, and other factors discussed in the "Cautionary
Statement" in BP's Annual Report and Form 20-F 2011 (SEC File No. 1-06262) as
filed with the United States Securities and Exchange Commission.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
MSCFEUFIEFESEDF -0- Nov/22/2012 15:45 GMT
Press spacebar to pause and continue. Press esc to stop.