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TNK-BP Holding Declines on Rosneft Borrowing Plan: Moscow Mover

OAO TNK-BP Holding (TNBP) fell the most on record in Moscow trading after new owner OAO Rosneft said it may borrow funds from the oil producer, raising concern it may scrap dividends.

The stock slumped as much as 25 percent, the biggest decline since starting to trade in December 2010. It was down 23 percent at 37.17 rubles as of 6:01 p.m. local time.

The company is the traded unit of TNK-BP, which was bought by Moscow-based Rosneft last week. Its new parent approved a borrowing limit of $10 billion from TNK-BP’s affiliated businesses, including about 114 billion rubles ($3.7 billion) from TNK-BP Holding and two of its units, a filing showed today.

“This is not an encouraging precedent for TNK-BP Holding shareholders,” Alexei Kokin, an oil and gas analyst at UralSib Financial Corp., said by e-mail. The loans may mean Rosneft is gaining access to TNK-BP Holding’s cash by means other than dividends, he said.

Rosneft became the world’s largest oil producer by output when it closed its $55 billion acquisition of TNK-BP from BP Plc (BP/) and a group of billionaires. A Rosneft official said today that so-called cash-pulling is a standard practice.

It “permits the effective management of available liquidity,” the official said by e-mail, asking not to be identified, citing company policy.

Rosneft Chief Executive Officer Igor Sechin said last week that the state-run oil producer won’t buy shares held by minorities in TNK-BP Holding. He said last October that TNK-BP’s dividend policy may be terminated.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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