Through a combination of production growth, cost control, growing profitability and strong free cash flow generation, Rosneft has reduced its debt by more than one-third from its peak of $36 billion in June 2007.
Rosneft has completed early repayment of more than $5 billion of outstanding debt, including $4.2 billion of the bridge facility and $1 billion to retire facilities from Sberbank and VTB. The remaining $2.3 billion of the bridge facility will be paid from the company’s cash balances upon maturity in September 2008.
Recent refinancing transactions completed include a $2.35 billion repurchase (repo) agreement and a $2.85 billion syndicated loan. The repo agreement was signed by RN-Razvitie on June 17, 2008, and is secured by a portion of Rosneft shares acquired at an auction in 2007.
Funds were provided at an interest rate of 5.75% for one year by a bank syndicate comprising Barclays Bank as lead arranger, BNP Paribas, Credit Suisse Securities Europe, JP Morgan Securities, Morgan Stanley & Company International, Nexgen Capital, Societe Generale and the Royal Bank of Scotland.
