Soviet-born tycoons selling out of TNK-BP will largely reinvest the proceeds from Russia’s biggest takeover deal back into the country, the AAR consortium said on Tuesday, following President Vladimir Putin’s call on them to do so.
OAO Rosneft this month finalized a deal to buy half of the Anglo-Russian oil firm for $28-billion from AAR, a consortium of four billionaires – Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik.
Mr. Putin said at a news conference last week he hoped the cash gained through the deal would be reinvested into Russia.
“For AAR, Russia was and will be the base platform for investment and it is Russia where they are planning to invest the biggest part of the proceeds, received through TNK-BP share sale,” it said in a statement.
The quartet will receive cash on completion of the deal which should win a green light from Russian and European regulators in the first half of 2013.
British oil firm BP PLC is also selling its half of TNK-BP to Rosneft, the state-controlled oil major, for $27-billion in cash and stock, valuing the entire takeover at $55-billion.
The transaction could add to chronic capital outflows from Russia, an issue that Mr. Putin highlighted in his annual state-of-the-nation address earlier this month.
AAR said it will also invest in international assets, in order to bring modern technologies into Russia.
Rosneft will buy out BP’s half stake in TNK-BP for $17.1-billion in cash and 12.8 per cent of its own shares, bringing down the curtain on a profitable but fractious alliance between BP and the oligarchs struck back in 2003.Report Typo/Error