News Column

Russian Federation : LLOYDS pulls out of £1billion finance deal to help BP purchase RUSSIAN oil

June 4, 2014

The bank part-owned by the Government, Lloyds, withdrew from a trade finance deal valued between £895 million and £1.2 billion involving Rosneft, the Russian oil company, in a development that highlights the increase unease among Western banks in financing Russian deals.

Lloyds, along with Deutsche Bank, Bank of China, and HSBC, was a mandated lead arranger on the loan to fund BP's purchase of crude oil and refined products from Rosneft.

according to banking sources close to the talks, the loan would have been similar to previous deals Rosneft had with BP or the trading houses Vitol and Glencore but, Lloyds decided to walk away after many weeks of hesitation.

The bank is 25%-owned by the Government, which repeatedly condemned Russia for its actions in eastern Ukraine and Crimea. Rosneft's boss Igor Sechin, an ally of Vladimir Putin, was hit by US sanctions as part of a move to punish Russia for the annexation of the Crimean peninsula.

One of the bankers said, Lloyds's decision to leave the deal is because it does not want to embarrass the Government, considering the current political situation with Russia. I think it was scared of going upstairs to ask permission.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: TendersInfo (India)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters