* Agreement to ease $55 bln sale to Rosneft
* Dividend payments unlikely - sources
* Uncertainty over minority damages appeal hearing
By Douglas Busvine and Melissa Akin
MOSCOW, Nov 8 The Soviet-born billionaires who
share ownership of Anglo-Russian oil firm TNK-BP with
partner BP declared an end to a boardroom stalemate on
Thursday, a step that could smooth the way to selling the
AAR said the 50-50 owners had agreed that although the board
was still short of a third independent director, following a
resignation, it should be allowed to agree such matters that
require a simple majority as well as those that need unanimity.
Protacted boardroom discord has up to now blocked billions
of dollars of dividend payments by TNK-BP and sources familiar
with the matter said the easing of friction between the
co-owners of Russia's No.3 oil firm would allow the partners to
focus on finalising the $55 billion sale of TNK-BP to Russian
state oil major Rosneft.
Any payout now would reduce the price payable by Rosneft by
an equivalent amount, but it would give both parties cash in
hand. Neither side would comment on whether they would propose a
dividend under the newly co-operative board atmosphere.
With the hatchet buried, the TNK-BP board numbers 10, with 4
apppointees from each side and 2 independents, one appointed by
each. A disagreement could therefore still end in stalemate, but
it does become statistically less likely.
"This agreement will enable the parties to better focus on
preparing their respective transactions with Rosneft, while
having a fully-functioning board of directors will ensure
effective corporate governance and business continuity," AAR CEO
Stan Polovets said in a statement.
BP said: "We welcome the restoration of governance as we
work to formalise the transaction with Rosneft."
In a deal that would end a hugely profitable but fraught
partnership, BP agreed last month to sell its one-half stake in
TNK-BP to Rosneft in a cash-and-stock deal worth an estimated
Counting the $19 billion in dividends since buying half of
TNK-BP for $8 billion in 2003, BP stands to make six times its
BP would net more than $12 billion in cash and end up owning
20 percent in Rosneft, headed by Igor Sechin, a close ally of
Russian President Vladimir Putin.
Sources say that valuations for the deal are based on a
so-called "lock box" basis, meaning that cash paid out of TNK-BP
after the beginning of this year would be subtracted from the
AAR has also signed an outline deal to sell its stake in
TNK-BP for $28 billion in cash. Sources close to TNK-BP said the
tycoons - Mikhail Fridman, German Khan, Viktor Vekselberg and
Len Blavatnik - have been pushing for the deal to include
Another source close to the sale talks said there was "no
way" that AAR would get shares, however, and that Rosneft's
priority was to complete the BP leg of the transaction without a
hitch. A full takeover would transform Rosneft into the world's
largest listed oil producer.
Rosneft has made progress in talks with foreign banks on
raising loans totalling $33.5 billion, or possibly more, to fund
the takeover, bankers told Thomson Reuters LPC on Wednesday.
In addition, four or five Russian banks would lend around $1
billion each to Rosneft, which itself would commit $7.5 billion
in cash to the transaction.
The de-escalation nullifies the threat of possible damages
claims against BP that the TNK-BP board might have approved,
with AAR's support, after the British oil firm's failed attempt
last year to strike a strategic alliance with Rosneft.
AAR won an injunction in the UK courts against the
BP-Rosneft partnership, which was later abandoned, arguing that
the pact violated an exclusivity clause in the TNK-BP
Uncertainty persists, however, regarding an appeal hearing a
$3 billion damages award to minority shareholders in TNK-BP's
listed subsidiary, TNK-BP Holding, that will be heard by a
Siberian appeals court on Friday.
Sources speculated that the minority shareholders, led by
plaintiff Andrey Prokhorov, may reconsider their suit - also
over last year's BP-Rosneft deal - as it would put them at odds
with Kremlin-backed Rosneft.
They also noted that, should the judge find in favour of the
plaintiffs, BP would be required to pay. Lawyers for both sides
declined comment on the case, which lawyers for BP have in the
past dismissed as "absurd".