Follow us on:   

Gazprom mulls issuing bonds in offshore yuan
December 26, 2014, 9:10 am

Gazprom this year signed two accords with China for potential total supplies of as much as 68 billion cubic meters of gas from Russia annually [Image: Gazprom]

Gazprom this year signed two accords with China for potential total supplies of as much as 68 billion cubic meters of gas from Russia annually [Image: Gazprom]

Amid a growing push by Russian companies to find alternative funding to offset US and EU sanctions, Gazprom Chief Financial Officer and Deputy CEO Andrey Kruglov said on Friday that the Russian energy giant is considering issuing bonds in offshore yuan in Hong Kong.

Kruglov noted that Chinese commercial banks may syndicate loans for Gazprom’s corporate purposes.

Earlier this week, China’s Foreign Minister pledged support to Russia as it faces an economic downturn due to sanctions and a drop in oil prices.

“Russia has the capability and the wisdom to overcome the existing hardship in the economic situation. If the Russian side needs it, we will provide necessary assistance within our capacity,” Chinese Foreign Minister Wang said on Monday.

On Friday, the Russian natural-gas exporter said it is not bracing for any serious impact of sanctions on financial results.

“Gazprom’s total debt and debt ratios historically stay at comfortable levels for the corporation while its cash balances of over $20 billion reduce its net debt level,” CFO Kruglov said on Friday.

Gazprom may sell its first bond in China by the start of 2015, Interfax agency reported in October, citing Alexander Ivannikov, Gazprom’s first deputy head of finance. Gazprom Chief Executive Officer Alexey Miller met with Industrial & Commercial Bank of China Ltd. Chairman Jiang Jianqing in October to discuss a possible sale of offshore yuan bonds.

Chinese Commerce Minister Gao Hucheng also proposed last week to expand the use of the yuan in trade with Russia.

OAO Gazprom, the world’s biggest natural-gas company by output, took a $485 million loan from Italy’s UniCredit SpA this month.

While Gazprom’s oil unit OAO Gazprom Neft is off limits for banks, the natural-gas producer overall is not named on US or European financial embargo lists.

Earlier this month the US Congress voted for tougher sanctions on Russia that would require penalties on Gazprom if the state-controlled company withholds gas supplies to other European nations.

Meanwhile, Gazprom this year signed two accords with China for potential total supplies of as much as 68 billion cubic meters of gas from Russia annually.

Gazprom earlier this year struck a $400 billion, 30-year gas-supply deal with China as Russian President Vladimir Putin boosts ties with the world’s second-largest economy.

The Russian government is boosting coordination to shore up confidence in the ruble after it tumbled more than 50 per cent in 2014.

 

TBP and Agencies

Leave a Reply

Your email address will not be published. Required fields are marked *

Anti-Spam *