CDB contributes $1.08 billion to $4.18 billion syndicated loan for acquisition of PetroKazakhstan Inc.

On August 22, 2005, PetroKazakhstan Inc. (PKZ) announced that it had entered into an Arrangement Agreement whereby a wholly-owned subsidiary of CNPC International Limited (CNPCI) would offer $55.00 per share in cash for all outstanding common shares of PetroKazakhstan. The aggregate value of this transaction was approximately $4.18 billion. The offer represented a premium of 24.4% based on the weighted average closing price of PetroKazakhstan common shares on the New York Stock Exchange for the twenty previous trading days ending August 19, 2005 and a 21.1% premium to the closing price on August 19, 2005, the most recent date on which the shares traded. Then, in September 2005, CNPC International Limited secured a $4.18 billion (€3.4 billion) bridge loan from a syndicate consisting of 3 banks — Citigroup, Sanpaolo IM (now part of Intesa Sanpaolo), and China Development Bank (CDB) — to facilitate the acquisition of PetroKazakhstan Inc. It is known that Citigroup contributed $2.1 billion and Sanpaolo IM contributed $1 billion to the syndicated loan. Therefore, AidData assumes that CDB contributed the remaining $1.08 billion. The borrowing terms of the loan are unknown. Russia's largest oil company, Lukoil, asked an Alberta court to hold up the sale while it sought a ruling on whether it should have the first opportunity to buy an oil field that it and PetroKazakstan Inc. co-owned. However, Justice Neil Wittmann of the Alberta Court of Queen's Bench approved the sale in October 2005. The Kazakh Parliament also objected to the sale of PetroKazakhstan Inc. to CNPC. Those objections were overcome, however, when CNPC agreed to sell a 33% equity interest in PetroKazakhstan Inc. to KazMunaiGas NC JSC (a Kazakh national oil company). Then, in August 2006, CNPC E&D entered into an acquisition agreement to acquire a 67% equity interest in PetroKazakhstan Inc. from CNPCI for a consideration of $2.735 billion. This acquisition was consummated in December 2006.

Additional details

1. The Chinese project title is 哈萨克斯坦PK收购 or 中石油收购哈萨克斯坦PK 公司. 2. PetroKazakhstan Inc. is a vertically integrated, international energy company, in the Republic of Kazakhstan. It is engaged in the acquisition, exploration, development and production of oil and gas, refining of oil and the sale of oil and refined products. CNPC International Ltd. ("CNPCI") is wholly owned by China National Petroleum Corporation (CNPC). CNPC E&D is a joint venture equally owned by PetroChina and China National Oil & Gas Exploration and Development Corporation, subsidiaries of CNPC. 3. On October 18, 2005 the Alberta Province Court (Canada) postponed a transaction approval of PKZ assets acquisition by CNPC until October 26, 2005 in accordance with LUKOIL's claim concerning its preemption right recognition to purchase a share in Turgai Petroleum – a joint venture of LUKOIL and PKZ.

Number of official sources

11

Number of total sources

26