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. Last Updated: 07/27/2016

Rosneft Gets New Loan Terms

State-controlled Rosneft, the country's largest oil company by market capitalization, won waivers from creditors after it breached the terms of earlier loans by buying and consolidating a unit of Yukos.

The lenders gave Rosneft until Jan. 3, 2008, an extra year, to discharge or restructure the unit's guarantee of Societe General's $1.6 billion loan to now-bankrupt Yukos and tax claims made against the unit, Rosneft said Thursday in a fourth-quarter 2006 report to the market regulator posted on its web site.

The banks had the right to demand early repayment of their loans to the state-run company after a previous grace period ran out at the end of 2006.

Rosneft tripled output in 2005 after buying Yuganskneftegaz, which the government seized from Yukos and sold as it drove what was once the country's largest oil exporter to bankruptcy with billions of dollars in tax claims. Rosneft increased its debt more than fivefold to $22.7 billion in 2005 after borrowing to buy Yugansk.

Rosneft said it would not have to pay off the Societe Generale loan after Yugansk won a Moscow court decision in March 2006 overturning the guarantee. A Yukos affiliate, Moravel Investments, is suing Yugansk over the guarantee in the London Court of International Arbitration. The remainder of the loan amounted to $656 million at the end of last year, Rosneft said.