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UPDATE 2-Russneft says Glencore may swap debt for shares
September 27, 2013 / 9:59 AM / in 4 years

UPDATE 2-Russneft says Glencore may swap debt for shares

* Gutseriyev puts Russneft debt at $4 bln

* Firm going through restructuring and refinancing talks

* Glencore has deal to keep buying crude for 20 years

By Katya Golubkova and Dmitry Zhdannikov

SOCHI/LONDON, Russia, Sept 27 (Reuters) - Commodities trader and mining giant Glencore Xstrata could become a shareholder in Russian oil firm Russneft as part of a debt restructuring, Russneft’s owner said on Friday.

“If Glencore chooses to convert some of Russneft’s debt into shares, it may well become a shareholder,” Mikhail Gutseriyev told Reuters by telephone.

Glencore, which declined to comment, helped Gutseriyev build up Russneft a decade ago into a mid-sized oil firm and is still owed around $2.3 billion out of Russneft’s total debt of $4 billion.

But while being a big buyer of Russian oil it still has only a modest presence in oil production in the former Soviet Union, having accumulated minority stakes in some production units of Russneft.

Gutseriyev said that regardless of whether Glencore chooses to convert debt into shares, the trading house will remain the main buyer of Russneft’s oil under a renewed 20-year deal.

He said Russneft was currently going through a restructuring and debt refinancing with creditors with the aim of cutting interest payments on its debt, streamlining its corporate structure and cutting costs, and ultimately raising production.

“Our aim is to bring down interest payments on our credits and fully repay debts by 2017-2018,” he said, adding that the firm was also aiming to increase output to 18 million tonnes in the mid-term from the current 14 million tonnes, equivalent to 280,000 barrels a day.


Earlier on Friday, Gutseriyev told reporters that he had bought from Sberbank, another major creditor, the two percent of Russneft he did not already own, acknowledging for the first time that he has again become the sole owner of the company he created a decade ago when he bought parts of Slavneft, which he ran, soon after its privatisation.

Now ranked 34th in Forbes magazine’s latest Russian rich list, Gutseriyev fled Russia in 2007 following accusations of tax fraud.

At the time, he agreed to sell Russneft to aluminium tycoon Oleg Deripaska, but the deal never materialised, and he sold 49 percent to Russian oil-to-telecoms conglomerate Sistema instead.

Gutseriyev returned in 2010 and Russia has since dropped a criminal case against him. Gutseriyev agreed to buy the Sistema stake back in June for $1.2 billion, according to sources close to the company.

On Friday Gutseriyev also said he had no plans to buy a stake in Russian potash company Uralkali, the recent subject of much takeover speculation, despite earlier media reports he was among interested bidders.

“How could an asset which makes money be not interesting ? ... If I had money, I would buy ... (but) I don’t need it,” he told reporters.

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