The deal on purchasing a 14.2% stake in Rosneft from the Glencore-QIA Consortium by China’s CEFC has been frozen due to financial issues, Kommersant wrote.
Pouring $9.1 bln into obtaining the stake in the Russian oil and gas company could lead to a substantial increase in the debt burden. That being said, the deal is heavily dependent on external borrowings, and therefore can lead to a significant increase in CEFC’s debt, according to China Chengxin Credit Rating Group.
Kommersant’s sources noted that the Chinese company has already made an initial payment for the transaction. One of the sources believes that, if China gives up the deal, it will forfeit a large sum of money to penalties, which can be equal to the down payment itself.
Meanwhile, political issues are exacerbating CEFC’s financial problems. In early March, Chinese media reports said the company’s Chairman Ye Jianming had been detained on suspicion of corruption.
