London-listed commodities trader and Qatar invest €10.5bn for almost a fifth of company as part of Kremlin asset sale

This article is more than 3 years old

This article is more than 3 years old

Glencore is among investors to have paid €10.5bn (£8.9bn) for an almost 20% stake in Russia’s state oil firm, Rosneft.

The London-listed commodities trader will invest alongside Qatar as part of a Kremlin strategy of selling assets to raise funds needed to fill a hole in its budget left by low oil prices.

A Kremlin spokesman, Dmitry Peskov, described the deal as the largest in the global energy industry this year.

He added that Vladimir Putin had congratulated Igor Sechin, Rosneft’s chief executive, but also told the close ally to work with the ministry of finance and central bank to prevent the deal disrupting Russian currency markets.

Glencore and Qatar’s investment means they join BP on the Rosneft share register. The British oil company was handed an 18.5% stake in landmark tie-up in 2011.

It is unclear how much of the latest deal will be funded by Glencore, which has wrestled with a burdensome debt pile that reached $30bn (£23.7bn) at one stage, amid stubbornly low commodity prices.

But the Switzerland-based company indicated this month that it had dealt with the debt problem, as it announced plans to resume dividend payments next year aftersuspending them in September 2015 to conserve cash.

The dividend freeze was part of a $10bn debt reduction plan that also included asset sales.

Glencore’s investment in Rosneft came as a surprise to markets, despite its chief executive, Ivan Glasenberg, saying earlier this month that the cost-cutting drive was complete.

The deal was yet to be officially announced by the time stock markets closed on Wednesday, but industry sources indicated it was on the verge of being announced.