Financial News 2012: 'Rothschild's Russia office, which is headed by James Friel, has been in operation for over a decade'
Investment Bank of the Week: Rothschild in Russia
Independent advisory firm has added another major Russian deal to its shelf of tombstones, after the owners of TNK-BP employed the bank to help it buy out UK oil giant's stake
The Alfa Access-Renova consortium, comprised of Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, have employed Rothschild to help organise a loan syndicate to buy out BP. The consortium faces competition from rivals including Rosneft, the Russian oil giant led by former deputy of energy Igor Sechin, which is also interested in buying BP's stake.
BP announced in July it was putting its stake up for sale, after relations became strained. Last year, AAR issued a high-court injunction against BP, after the British company announced plans to form an exploration alliance with Rosneft.
Khan told Russian daily Kommersant yesterday that a bid will have to be made before October 17, when a 90-day negotiation period expires. AAR has the exclusive right to a first bid under the shareholder agreements.
Rothschild's Russia office, which is headed by James Friel, has been in operation for over a decade. Giovanni Salvetti, who looks after the CIS region, is also based out of the office.
The win adds another major Russian client to the roster. In 2010, Rothschild managed the tender sale and privatisation of a 50% stake in Russian Railways subsidiary OJSC Elteza to Canadian manufacturer Bombardier.
In 2009, oligarch Oleg Deripaska, the controlling shareholder of aluminium giant Rusal, employed Rothschild to help the firm restructure $16.8bn of debt. In 2010, Rothschild also helped list Rusal for £2.2bn on the Hong Kong stock exchange, the first Russian company to list in the country.
Earlier this year, Rothschild provided a fairness opinion to the independent directors of Russian telecommunications provider Sitronics on Sitronics' acquisition by a subsidiary of Russian conglomerate Sistema.
Rothschild has a significant presence in the energy and power sector, with a 26% market share in all announced European M&A in the energy and power sector over the first nine months of the year, according to data from Thomson Reuters. This is second only to Barclays, which has a 32% market share.
Rothschild also has a strong link to Russia's energy sector. In 2006, Rothschild advised Royal Dutch Shell on its disposal of a stake in the Sakhalin Energy Investment Company to Gazprom.
The win marks a successful week for the bank, with the completion of German insurer Talanx's IPO on Wednesday, which was thrown into doubt at the end of September following disagreement surrounding the firm's valuation. Rothschild was an adviser to Talanx, which cancelled its IPO at the end of September, blaming the investment banks on the deal for under-valuing the company. The IPO was relaunched a week later, and priced on Monday for a lower valuation,
Rothschild also this week acted as the sole financial adviser to frozen food group Findus on its £950m financial restructuring.
Rothschild declined to comment.
--write to giles.turner@dowjones.com
Correction: An earlier version said Rothschild advised Russian telecommunications provider Sitronics. In fact Rothschild advised the independent directors of Sitronics.
Source: https://www.fnlondon.com/articles/investment-bank-of-the-week-rothschild-russia-tnk-russia-20121005