GLEN Glencore Plc

By Scott Patterson 

LONDON -- Glencore PLC and Qatar finalized a deal Saturday to take a one-fifth stake in the state-owned Russian oil giant Rosneft for EUR10.2 billion (about $10.8 billion), sealing a deal that will bring much needed cash to Russia during an economic crunch.

The Qatar Investment Authority will invest EUR2.5 billion, on top of the EUR300 million Glencore will commit to the deal, the Swiss commodity giant said in a statement late Saturday. The remainder of the investment will be provided by a consortium of banks led by Italian firm Intesa Sanpaolo. Russian banks will also provide financing for the deal, Glencore said.

The value of the assets for Glencore's side of the transaction -- 50% of the investment -- is EUR5.1 billion, the firm said. It said the profits for those assets in 2015 was EUR511 million.

Details of the investment emerged earlier this week in a transcript of a meeting between Rosneft Chief Executive Igor Sechin and Russian President Vladimir Putin. The Russian state will retain a controlling stake in Rosneft, which is also partly owned by U.K. oil major BP PLC.

"Glencore looks forward to working with both parties to take advantage of the significant opportunities which are expected to be presented across the Russian and global oil markets," Glencore Chief Executive Ivan Glasenberg said in a statement.

Weak oil prices and a two-year budget crisis have hurt the Russian economy, creating a cash crunch and forcing it to sell off a huge stake in Rosneft, one of the country's state-owned crown jewels.

The deal marks a shift away from China, where Russia has largely gone to for financing in recent years. Rosneft is among the companies under U.S. sanctions that restrict its ability to raise debt in U.S. dollars.

Write to Scott Patterson at scott.patterson@wsj.com

(END) Dow Jones Newswires

December 10, 2016 16:34 ET (21:34 GMT)

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