NK Rosneft’ OAO’s share price down, announces a $7-billion repayment in debt for TNK-BP bridge loan

NK Rosneft’ OAO reported that a total of $7 billion in debt was repaid. The company also said it is generating enough profit in order to meet its obligations related to the $55-billion purchase of TNK-BP in 2013. Rosneft claimed its ambitions to become the biggest traded oil producer worldwide.

A total of $25 billion of the foreign debt of Rosneft has been repaid. The net debt of the company amounted to 1.77 trillion rubles ($31.08 billion) by the end of the third three months of the current fiscal year.

Another bridge loan that amounts to $7.1 billion is scheduled to be repaid by the Russia-based company on February 13th. This would be the first part of the debt repayments, which are estimated to $19.5 billion and are expected to be covered in 2015.

The Chief Executive Officer of the company, Igor Sechin, said in the statement, cited by Bloomberg: “To service debt the company does not need to enter the currency market, because it generates enough foreign currency earnings.”

Rosneft was seriously affected by the sanctions, which were imposed by the U.S. In addition, the EU has limited its access to capital markets. In August the Russia-based company asked the local government for a state aid of 1.5 trillion rubles ($25.97 billion) and explained that it needed the money to cover sanctions.

The Russian government has not yet decided with what sum to provide the company from the National Wealth Fund. Some analysts are skeptical about such prospects, expressing concerns that Rosneft is too large for the country to fund. Rosneft currently produces more oil in comparison to Iran or Iraq.

An analyst at a key Russian bank who asked not to be identified, commented on the situation for Reuters: “As for other companies, there is still concern, but I do not expect large-scale defaults on the public debt market.”

NK Rosneft’ OAO fell 1.40% to trade at RUB 194.15 per share as of 13:59 GMT, marking a one-year loss of 20.29%.