(MENAFN - AFP) Russian oil firm Rosneft said Monday it had signed two loan agreements worth 16.8 billion to finance the acquisition of British giant BP's 50-percent stake in the TNK-BP joint venture.
Rosneft said it had obtained a five-year loan of 4.1 billion and a two-year loan of 12.7 billion from a group of large US and European banks that include Bank of America Merrill Lynch and Barclays.
"We would like to thank our financial partners for prompt decision-making, ensuring the completion of a deal unprecedented for the Russian market," Rosneft chief executive Igor Sechin said in a statement.
TNK-BP has been Russia's third-largest oil producer and a key holding of BP that was responsible for billions of dollars in annual profits.
But the company was torn apart by board disputes between BP and the four Soviet-born tycoons who ran the other half of the company.
BP put up its stake for sale in June and then agreed to a deal with Rosneft that offered it access to potential contracts in the Arctic and other lucrative Russian zones.
The Russian firm then struck a separate 28-billion deal with the Russian tycoons that gave it full ownership of TNK-BP -- a move further consolidated the state's hold on the lucrative oil sector.
The terms of the BP buyout will see Rosneft pay 17.1 billion in cash and shares that give the British group a 12.84-percent equity stake in Rosneft.
BP also plans to buy a separate 5.66 percent share from the Russian state for 4.8 billion. Those purchases and its current 1.25 percent holding will give 19.75 percent of Rosneft's equity to the British firm.