The US Treasury has rejected a bid by a consortium led by US bank Xtellus Partners to acquire the foreign assets of Russian oil company Lukoil, four sources familiar with the negotiations told Reuters, News.bg reports.
Xtellus was competing with a number of major international players, including Exxon Mobil, Chevron, Abu Dhabi-based International Holding Company, Hungary's MOL and US investment group Carlyle. All of them remain among the potential buyers.
“Lukoil“ offered to part with its assets after the United States imposed sanctions on the company and Kremlin-controlled rival Rosneft in October as part of efforts to pressure Moscow to reach a peace deal with Ukraine.
According to the sources, more than a dozen companies have submitted bids for the assets, which are valued at about $22 billion. They include oil and gas fields, refineries, and more than 2,000 gas stations in Europe, Central Asia, the Middle East, and North and South America.
Xtellus' offer envisaged a cashless deal in which Lukoil securities held by U.S. investors would be returned to the Russian company in exchange for the acquisition of its global assets.
According to the sources, Lukoil management supported the offer, but its execution proved too complicated. Xtellus acted as an advisor to its partners in the deal, which included American billionaire Todd Boely and the investment group Allied Investment Partners from the United Arab Emirates. One of the sources indicated that a preliminary agreement for the purchase of shares had already been signed.
However, the Ministry of Finance notified the consortium that it was not allowed to use sanctioned securities in such a transaction, which led to the refusal to approve the deal.
The group, led by Xtellus, intends to appeal the decision to a higher level in the US administration and apply for a special license that would allow the use of the assets in question.
American investment funds hold significant stakes in “Lukoil“, which were frozen and written off after Russia's invasion of Ukraine in 2022, causing losses of billions of dollars. The plan was to transfer these shares back to “Lukoil“ and the resulting assets would then be sold to compensate investors.
Last week, the US extended the deadline for negotiations with “Lukoil“ to January 17.