Switzerland’s Gunvor oil trading company is discussing the purchase of foreign assets put up for sale by Russia’s “Lukoil” company following new sanctions imposed by the US and UK, Reuters reported. Gunvor’s total capital amounts to $6.8 billion, most of which consists not of factories and equipment, but of cash funds.
To buy Lukoil’s assets, the company would need to borrow about $18 billion, which bankers believe is almost impossible. Such a debt burden could significantly limit the company’s ability to obtain credit.
In addition, the deal is expected to undergo strict scrutiny in the countries where Lukoil’s assets are located. Furthermore, Gunvor’s past ties with Russia are also seen as a risk factor.
The company was previously a major trader of Russian oil, but now states that it is focusing on the US and other markets. Lukoil’s foreign business is estimated to be worth around $22 billion, and includes factories in Europe, stakes in fields in Kazakhstan, Uzbekistan, Iraq, and Mexico, as well as hundreds of fueling stations worldwide.
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