Novatek needs to preliminarily settle a loan to SRF fund for Yamal LNG if the deal is not closed

​Novatek is to settle in advance the loan issued by the Chinese investment fund “Silk Road Fund” (SRF) if the deal on the sale of 9.9% in Yamal LNG is not closed, Novatek reports under IAS.

The loan is to be settled until December 2030 in equal payments every half a year beginning from December 2019 and it presupposes a number of restrictive financial conditions. In case the deal on the sale of 9.9% in Yamal LNG is not closed, the loan needs to be settled in advance.

In December 2015 Novatek and SRF signed a purchase-and-sale agreement on the sale of 9.9% in Yamal LNG to SRF.

In mid December 2015 SRF signed an agreement on the purchase of 9.9% in Yamal LNG from Novatek. The intergovernmental agreement on the purchase of shares of Yamal LNG by SRF was signed in early September. Before the deal Novatek’s stake in Yamal LNG made up 60%, another 20% are held by Total and CNPC. After the sale Novatek’s stake will fall to 50.1%.

The deal presupposes a number of suspensive conditions and was not closed as of December 31st 2015. It presupposes the monetary payment and the issue of a loan to Novatek for 15 years to finance Yamal LNG project.