US investment bank Xtellus Partners has submitted a proposal to the US Treasury aiming to reimburse American investors who suffered losses in Lukoil, through the sale of the Russian oil company’s foreign assets. Asset managers including BlackRock, JP Morgan, and Goldman Sachs were forced to freeze and subsequently write off their holdings in Lukoil after the invasion of Ukraine in 2022.
A non-cash swap proposed by Xtellus
According to four sources familiar with the matter, Xtellus Partners is proposing a cashless transaction: shares held by American investors in Lukoil would be exchanged for the company’s international assets. This structure would bypass current restrictions on fund transfers to Russian entities, particularly those under US sanctions. Neither the US Treasury nor Lukoil have commented on the proposal.
A consortium led by Boehly and UAE investors
The Xtellus plan is backed by American billionaire Todd Boehly and United Arab Emirates-based Allied Investment Partners. Both entities would coordinate the resale of the assets once the exchange is completed. Representatives for Boehly declined to comment, and Allied Investment Partners did not respond to inquiries.
Highly sought-after assets valued at $22 billion
Lukoil’s international assets, estimated at $22 billion, have drawn interest from several parties. US private equity firm Carlyle and energy company Chevron are among the potential buyers. Lukoil’s operations overseas, including in Iraq and Finland, have been disrupted by US sanctions imposed in October on both Lukoil and Rosneft, Russia’s two largest energy firms.
Tight deadline and regulatory hurdles
Lukoil faces a December 13 deadline to complete the sale of these assets, although it has requested an extension, according to two sources. Paying in shares could accelerate the deal, as current sanctions prohibit cash payments to the company. Any potential buyer would need to reach an agreement with Lukoil and obtain final approval from the US Treasury.
Before the conflict, Western investors held over 25% of Lukoil’s capital. The company is currently valued at around $50 billion. It was also part of key equity indices before being removed in March 2022 by index providers FTSE Russell and MSCI.
