Lukoil can attract up to 20 billion yuan in the subsidiary

LUKOIL (MOEX: Lkoh) I agreed to attract up to 20 billion yuan at a subsidiary of a subsidiary at 3.1% per annum. One of the trading structures of Lukoil, which has accumulated liquidity, can be a party to the transaction, experts say. Intragroup loans make it possible to optimize the tax burden, and the use of yuan facilitates the calculations, experts note.

PJSC Lukoil agreed with a subsidiary of borrowed funds to finance activities with a limit of 20 billion Chinese yuan (about 231 billion rubles at the Central Bank rate for March 26). This is stated in the reports of the company for RAS for 2024. The validity of the contract is December 31, 2025, a fixed rate – 3.1% per annum. Other details in the reporting are not disclosed. In Lukoil, they did not provide comments.

The main strategist “Capital Vector” Maxim Khudalov believes that the leader can be one of the trading structures with a large influx of payments in the yuan.

Probably, a foreign subsidiary has free liquidity in foreign currency, to which the maternal structure can gain access, says Birch Legal partner Andrey Shpak. The managing partner of the Novator Legal Group Vyacheslav Kosakov draws attention to the fact that the 3.1% rate indicated in the reporting corresponds to the basic interest rate on loans (LPR) for a period of one year established by the People’s Bank of China. Even the market attracting yuan is cheaper than loans in rubles or dollars, he points out. China today is one of the key buyers of Russian oil. According to Kommersant, Lukoil exported 32.5 million tons of raw materials in 2024, which is 6.39% less than a year earlier (See “Kommersant” from January 27).

White Stone lawyer Viktor Mashinsky notes that the use of intra -group loans allows you to reduce the current tax burden. “The interest accrued on the amount of funding provided is taken into account as expenses when calculating the tax base for income tax, which ultimately allows the borrower to reduce the amount of tax obligation,” he explains. Mr. Kosakov adds that if a subsidiary is registered in China or another friendly country, then you can work with currency, avoiding settlements through Western banks. But, adds Viktor Machinsky, regularly providing intra -group loans at a low rate entails the risk of taxing taxes if the borrower cannot give justification to attract funding.

Large Russian companies are increasingly attracting funds in the yuan. So, Rosneft has four outputs of bonds for 65 billion yuan in circulation. Rusal, as reported by Reuters on March 26, placed bonds of 650 million yuan at 10.9% per annum. And Gazprom Conducts The collection of applications for the first issue of bonds in the yuan. In February 2024, the financial director of Norilsklya said that the company considers priority borrowing in the yuan due to the export nature of sales, the trend of reorientation of operations to the east, as well as the low volatility of the yuan exchange rate to the US dollar.

According to Maxim Khudalov, Lukoil can be directed to the construction of a gas chemical complex at the Stavrolen plant, which includes the production of carbamide and ammonia, the expansion of the gas station network, the production of lubricants, the development of Vareneftegaz. In the next two years, Lukoil has to repay the Eurobonds, and part of the funds raised can be directed for these purposes, said Yuri Mirzoev, CEO of the MITRA law firm. As noted in the BCS review, Lukoil can support a large amount of funds on the balance sheet if the company will expand the presence in friendly countries. But, analysts note, risks for business are reduced by oil prices due to the decision of OPEC+ to mitigate the restriction of production. According to the results of 2024, the capital costs of Lukoil increased by 8.2% year by the year, to 779.7 billion rubles. The revenue increased by 8.7%, to 8.6 trillion rubles, net profit decreased by 26.6%, to 851.5 billion rubles, reports on IFRS.

Olga Semenov