ROME Italy has given its final blessing to a 5.2 billion euro loan made in January by bank Intesa SanPaolo to finance the privatisation of a stake in Russia's biggest oil company, after checking to ensure the deal did not breach sanctions.
Russia sold a 19.5 percent stake in Rosneft (ROSN.MM) in December for 10.5 billion euros, in one of the biggest transfers of Russian state assets into private hands since the 1990s.
The stake was bought by a consortium made up of Qatar and the oil trading company Glencore, which together provided 2.8 billion euros. The consortium borrowed funds from Intesa, Italy's biggest retail bank, to make up most of the rest of the purchase price.
The deal was subject to regulatory scrutiny in Italy because of the size of Intesa's loan and the potential for entanglement in EU sanctions on Russia. Rosneft itself, its boss Igor Sechin and Russia's main state banks are all subject to sanctions imposed after Russia's annexation of Crimea from Ukraine in 2014.
However, Italy's Financial Security Committee (FSC), a government body which includes officials from the finance, foreign and justice ministries, the central bank, finance police and anti-mafia prosecutors, found no sanctions violations.
The FSC, which gave preliminary blessing to the deal in January, concluded its inquiry in early March, officials said.
"At the end of all checks, we didn't find any kind of obstacle... The operation was carried out in compliance with all rules," said a spokesman for the FSC.
Glencore, Rosneft and the Qatari investment fund QIA declined to comment. Intesa's spokesman said: "No issues were raised by competent authorities."
According to four Italian government and banking sources, Intesa first agreed to lend the money to Glencore and Qatar on Dec. 6 and approached the FSC for approval, but this was held up until the new year because the new government of Prime Minister Paolo Gentiloni was sworn in only on Dec. 12.
Since the Russian government wanted to close the deal before the end of 2016, Russian state lender VTB provided a bridge loan while the buyers waited for the money from Intesa.
VTB is subject to sanctions, and the sources said the FSC investigated the Russian bank's role, but concluded that the bridge loan arrangement did not make the transaction illegal. VTB declined to comment.
Reuters reported in January that certain details of the deal could not be determined from public records, including the source of 2.2 billion euros in funding and the beneficial owners of a Cayman Islands company that is part of the consortium's ownership structure. Rosneft says the deal was transparent and Glencore and Qatar are the only owners of the stake.
(This refiled version of the story changes dateline to ROME)
(Additional reporting by Stephen Jewkes; Writing by Dmitry Zhdannikov; Editing by Peter Graff)