TNK-BP plans gatecrash of Rosneft share swap
Thursday 03 March 2011
TNK-BP is proposing to act as a middleman in BP's $10bn (£6.1bn) share-swap deal with Russian rival Rosneft, but the British oil major does not support the plan.
Under the scheme, TNK-BP would buy the 5 per cent of BP shares the company is already authorised to issue in respect of the Rosneft deal. The shares – worth around $8bn – would then be passed to Rosneft in return for 10 per cent of its stock.
TNK-BP can certainly afford the scheme. The group yesterday posted fourth-quarter profits up by 51 per cent to $1.9bn thanks to increased production, improving efficiency and soaring oil prices.
But BP was equivocal yesterday, ahead of a key meeting in Berlin on Friday when the TNK-BP board – made up of four BP appointees, the four Russian oligarchs of the AAR consortium and three independent directors – will vote on the plan. "BP has real financial, practical and strategic concerns about the proposal," BP said. "The BP directors on the TNK-BP board will evaluate the proposal on its merits and vote in line with their fiduciary responsibilities as directors of TNK-BP."
The issue was supposed to bedecided last week. But the Russians and the independent directors –including ex-German chancellor Gerhard Schroeder – were stood up after BP pulled out at short notice.
TNK-BP claims BP's Rosneft deal violates its shareholder agreement, which specifies that either party's business in Russia must be conducted through the joint venture.
Under the original agreement, BP and Rosneft are to swap the shares directly. Under the TNK-BP proposals, BP will receive a slug of cash and a half-share in the Rosneft stake through its 50 per cent ownership of the TNK-BP joint venture.
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