The Chinese company CEFC China Energy plans to borrow $5.1 billion from the second largest Bank of Russia VTB to partially Fund the purchase of shares in Rosneft worth $9.1 billion, told Reuters sources familiar with the situation.

Last month, the CEFC announced plans to buy 14,16% of Rosneft from a consortium of Swiss trader Glencore and the Qatari Fund QIA.

The Chinese conglomerate has received preliminary approval from the state to purchase a share in about a week after the announcement of the transaction.

Credit agreement to provide the CEFC loan in the amount of $5.1 billion will help the company to complete the transaction for the purchase of shares in Rosneft.

Two sources said that the loan is issued for one year, although one of them added that the repayment period may be extended for a year.

The CEFC will employ their own funds to pay the remaining $4 billion, said one source. The Chinese company is also conducting negotiations with China development Bank to refinance short-term loan provided by VTB, sources said.

“The China development Bank takes an active part in the negotiations on the re-loan and ready to provide 70% of the cost or even more,” said a source involved in the negotiations. Other Chinese banks may also participate in the refinancing, he added.

According to two sources, the deal will receive final approval from the Chinese authorities, including the State Council of China, until the end of 2017, because Beijing believes that this investment fits into the framework of the program “One belt and one road”.

The China development Bank, the largest creditor of the CEFC, has long supported the company, while some Chinese banks were afraid to take part in the financing of the transaction in force in respect of Russia sanctions, the United States.

Chinese CEFC will take a loan from VTB for the deal with Rosneft 12.10.2017

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