Rosneft confirms purchase of Severnaya Neft

Rosneft President Sergey Bogdanchikov and Andrey Vavilov, the owner of Severnaya Neft, have confirmed the information that they are completing the deal on selling a 100-percent stake in Severnaya Neft to Rosneft, representatives of the companies told RBC. The deal is for $600m.

As reported earlier, on February 11 S&P changed the forecast for the company's credit rating to negative, while leaving the B rating unchanged. However, there is a possible violation of the provisions of Rosneft's Eurobond issue.

The volume of the company's debts amounted to $990m at the beginning of 2003, which is very close to the highest permissible level of $1.25bn, according to the financial provisions of the $150m Eurobond issue at the end of 2001. According to S&P this may result in a technical default of Rosneft and the company will have to agree with its creditors on changing the provisions of the Eurobond issue.

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