Intesa Sanpaolo, Italy’s largest bank by market capitalization, has started the process to syndicate the $5.8 billion loan it had extended to Glencore and the Qatar Investment Authority to help them fund the acquisition of a 19.5% interest in Rosneft in December last year, Reuters reported on May 25, 2017, citing banking sources.
Intesa Sanpaolo is now looking at ways to spread the risk, and has launched a loan syndication process with a limited group of banks, a banker told Reuters.
The deal for the privatization of 19.5 % of Rosneft, announced in December and completed in January, valued the stake at around $11.3 billion.
Upon announcing the deal, Rosneft said that the acquisition would be financed with own funds from the buyers as well as debt financing, the bulk of which would be provided by Intesa.
The Italian bank’s loan to Glencore and the Qatar Investment Authority came under regulatory scrutiny over whether it would violate EU sanctions against Russia.
In March 2017, Italy’s Financial Security Committee approved the loan.
The Italian committee - which includes representatives of Italy’s foreign, justice, and finance ministries, as well as the financial police, the central bank and the anti-mafia authorities - found no violations.
Rosneft, as well as its chief executive Igor Sechin, are among the sanctions targets.
No Russian banks are involved in Intesa’s current syndication process, according to 2 of Reuters’ sources.
It is a complicated deal and not everyone will have the appetite for it, according to one banker.
In February, the head of Intesa’s operations in Russia, Antonio Fallico, told Reuters that the bank was talking to 14 banks to syndicate the loan, and would pick 2-3 banks to take up to $3.364 billion.
Back then, Fallico said that Intesa was in no rush to complete the syndication deal.