Vnesheconombank’s supervisory board regular meeting held
V.V. Putin’s opening address:
Some of you attended the United Russia’s conference in Khabarovsk yesterday, where we discussed plans for the Far East. Specifically, we discussed Vnesheconombank’s and other development institutions’ involvement in implementing investment projects in the region.
There are many interesting business ideas for the Far East, in particular for its fuel and energy sector, steelmaking, forestry and fishing industries. As I have already said, we plan to establish a Direct Investments Fund in the Far Eastern Federal District and the Baikal Region.
VEB’s participation in this Fund will make it possible to engage major financial institutions, funds and investment companies in cooperation. Today, we’ll discuss the Fund’s concept and proposals for its organizational structure. I would also like to note that yesterday Vnesheconombank signed an agreement on extending a three billion ruble loan to Dallesprom for building a deep timber-processing integrated plant in the city of Amursk in the Khabarovsk Territory.
We’ll also consider another project that is critical for the Far East, the reconstruction of the Knevichi airport. This project will be implemented as part of preparations for the APEC summit and the program to remake the image of Vladivostok.
A new modern passenger terminal’s commissioning would increase the airport’s capacity to four million people per year. After reconstruction, the airport’s runway will be able to operate almost all types of aircraft, both Russian and international. Vnesheconombank’s investment in the project will total four billion rubles, of which it has already provided 2.3 billion rubles in loans.
Today we’ll also hear out a report on the progress the Bank has made on its mortgage lending program. I’d like to emphasize that the program began nearly a year ago, and Vnesheconombank has already extended more than 4,000 mortgage credits worth some seven billion rubles, which account for about 30% of the credits received by Russian citizens to buy new housing.
I’d like to stress that as we expected the average interest rate – stands at 11% per annum. Moreover, the banks that obtained VEB’s credits have cancelled commissions for issuing credits. There are mortgage credits extended at lower interest rates. For example, Sberbank extends mortgage credits for several categories of employees at 9.5% per annum. There are also higher interest rates of 11%, 12% and even a bit higher. But the average interest rate stands between 11% and 11.5% per annum across the country. These are the target figures we set for this year. Not bad for a start. We can expect the amount of loans to increase significantly in 2011.
There are also proposals to expand Vnesheconombank’s involvement in housing program for the Bank to encourages not only mortgage lending but also accomplish a task of increasing housing construction.
To this end, Vnesheconombank could lend to commercial banks for them to fund projects aimed at building affordable economy-class housing. As we agreed before, this investment is to amount to 50 billion rubles, and the funding source is to be Vnesheconombank’s profits from transactions in financial markets. I’d like to remind you that the Bank generated significant profits from the increased value of Russian companies’ shares, which it bought during the crisis. And it makes sense to invest these profits in implementing housing programs. Credits will be extended at only 3%, which will allow banks to reduce interest rates for end borrowers, that is, natural persons. VEB will soon begin to finance regional and municipal projects to upgrade utilities infrastructure. The Bank will use public-private partnership mechanisms to modernize water and heat supply systems, municipal transport and other facilities. The Bank will commit two billion rubles for these purposes annually. And one more point: this year Vnesheconombank has raised more than $5 billion for a period of up to 15 years in the international market. It is the first time that a Russian lending institution has raised funds on such favorable terms. The Bank has also successfully placed ruble-denominated bonds worth 25 billion rubles. This testifies to the increased trust in Russian banks and shows that Vnesheconombank’s team is comprised of real professionals.
Let’s start our discussion.
Vnesheconombank’s supervisory board regular meeting held
V.V. Putin’s Opening Address
Today, we are holding our regular meeting of Vnesheconombank’s Supervisory Board. Our today’s agenda includes a number of new investment projects as well as issues of systemic nature such as for example the creation of effective instruments for implementing socio-economic plans. Here I mean the plans to develop the Northern Caucasus. We set ourselves a number of objectives in the Strategy for the Northern Caucasus, the Northern-Caucasian Federal District. The main one is to secure the development of this Russian region. We have to address the issues of transport, power engineering, we also have to upgrade populated localities but the main thing is to create 400 thousand new jobs for a period of 10 years.
To this end, huge government and private funds worth tens and even hundreds of billions rubles should be invested in the Northern Caucasus. In order to accomplish objectives of such magnitude we have to use advanced management systems in the top-priority economic sectors. Today, we’ll discuss proposals on some key elements.
Here I mean the Northern Caucasus Development Corporation and a company “Resorts of the Northern Caucasus”. Vnesheconombank is to found both these business entities. And in their operation they will rely on the Bank’s financial and expert potential.
The Northern Caucasus Development Corporation is to be responsible for monitoring investment projects - from idea to practical implementation. It is this Corporation, which should be responsible for preparing all required documentation, agreeing it upon with regional, local and federal authorities as well as for helping to obtain credits in financial institutions. Moreover, the Corporation’s most important task is to train local personnel, specialists so that they will be able to work in the modern conditions and raise investments on their own.
The company “Resorts of the Northern Caucasus” is to be established in order to manage a unified tourist complex that is being formed in the region now. Here I mean such resorts as Arkhyz in Karachaevo-Cherkessia, Lagi-Naki in Adygeya, Mamison in North Ossetia, Matlas in Dagestan and Elbrus in Kabardino-Balkaria.
I’d like to highlight two more issues. Firstly, Vnesheconombank is planning to participate in implementing a project aimed at developing Russia supercomputers manufacturing technologies and promoting their export. These technologies will be in great demand in power engineering, aviation, space exploration, nuclear power engineering and in many other economic sectors. And secondly, it’s a project to build a large stock-breeding complex in the Bryansk region.
We are well aware that this year the situation in the agro-industrial complex is quite difficult. Because of the drought, agro-industrial farms in a number of regions suffered heavy losses and are in need of the state’s support .We have already talked about it today. This sort of support is being provided now.
At the same time, we can see that many investors took a decision not to freeze their projects and continue to work for the future and build high-technology, large-scale production facilities, above all, in animal breeding, plant growing and logistics.
And we, of course, should back this approach. And we are going to deal with one of these projects. Here I mean Miratorg Company. A meat cattle-breeding complex for 100 thousand heads is planned to be built. This sort of production facilities have never been built in our country, even, if my memory serves me right, in the Soviet times. This complex would produce up to 48 thousand tons of beef a year.
A total amount of financing is in excess of 24 billion rubles, with Vnesheconombank’s participation share being 18.4 billion rubles.
Let’s get started with our work
On Decisions by Vnesheconombank’s Supervisory Board
VEB Enters into Capital of a Company Involved in Developing Supercomputers
Moscow, September 30, RIA Novosti. Vnesheconombank made a decision to enter into capital of T-Platforms Company, which is engaged in developing supercomputer technologies and services, Vnesheconombank Chairman Vladimir Dmitriev told journalists about it on Thursday.
VEB’s Supervisory Board spoke in favor of the project aimed at increasing capacities and entering international markets of Russia’s company engaged in developing supercomputers. This involves both software and design of computers. T-Platforms Company is a pretty well-known company both on the international and Russian market, said Mr. Dmitriev at a briefing after Vnesheconombank’s Supervisory Board meeting.
“We are entering into this company’s capital having a clear idea of withdrawing from the capital. This would allow the company to start serious production in Russia and strengthen its positions abroad”, added VEB’s Chairman.
He reminded that the Company participated in developing the Lomonosov supercomputer.
T-Platforms Company is the largest Russian holding involved in high-speed computations. The Group of companies provides a full range of solutions and services in supercomputer technologies and resource-intensive computations. Six systems developed by the Company were included in the rating of the most powerful supercomputers Top500.
Charter Capital of the Northern Caucasus Development Corporation to Amount to 500 million Rubles
MOSCOW, September 30. /PRIME-TASS/. Charter capital of the Northern Caucasus Development Corporation is to amount to 500 million rubles. Vnesheconombank Chairman Vladimir Dmitriev told journalists about it.
He said that Vnesheconombank would act as the Corporation’s founder. He added that he hoped that other investors and banks would be among founders and shareholders of the Corporation as well.
The Corporation’s task will be to monitor investment projects to be implemented on the territory of the Northern Caucasus and to consult regional authorities. The Corporation is expected to start operating as early as in November of 2010.
According to Dmitriev, original 500 million rubles to be invested in the Development Corporation’s charter capital will be enough to finance projects worth up to 9 billion rubles.
He added that earlier it had been said that the total amount of funds needed for implementing investment projects offered to be submitted for consideration by a would-be Development Corporation would be 2-3 trillion rubles. V.Dmitriev said that he was sceptical about most of these projects. In his opinion, even half of them are unlikely to be prepared properly in terms of bank risks and return on investment.
VEB and Sberbank to Invest 300 million rubles each in the Project “Resorts of the Northern Caucasus”
MOSCOW, Sept 30 – RIA Novosti. Vnesheconombank and Sberbank are to invest 300 million rubles each in the project “Resorts of the Northern Caucasus”. The project provides for creating five mountain-ski resorts in the region. Another 6 billion rubles are to be invested by OJSC Special Economic Zones, Vnesheconombank Chairman Vladimir Dmitriev said on Thursday.
“We have agreed with Sberbank that Vnesheconombank and Sberbank would invest 300 million dollars each in this company (OJSC Resorts of the Northern Caucasus), to my best knowledge OJSC Special Economic Zones would invest funds in the amount of 6 billion rubles”, Mr. Dmitriev said at a briefing after VEB’s Supervisory Board meeting where they discussed an issue of VEB’s participation in the project.
According to him, this mechanism would be used to raise private investment for this region to finance infrastructure and other facilities.
OJSC “Resorts of the Northern Caucasus” is to be founded to manage a unified tourist complex, which is being formed in the region now. Under this project the following mountain ski resorts are to be built: Arkhyz in Karachaevo-Cherkessia, Lago-Naki in Adygeya, Mamison in North Ossetia, Matlas in Dagestan and Elbrus in Kabardino-Balkaria.
VEB to Invest 7 billion Rubles in Float Glass Manufacturing
MOSCOW, Sept 30 – RIA Novosti. Vnesheconombank is to invest more than 7 billion rubles in building a float glass manufacturing factory in Dagestan, said Vnesheconombank Chairman.
“We hope that in the most immediate future after a detailed comprehensive examination of all documents is completed, funds would be made available and the amount of funds is as much as 10 billion rules, with Vnesheconombank’s participation share being more than 7 billion rubles”, said Dmitriev at a briefing on Thursday.
According to him, an appropriate decision was made at VEB’s Supervisory Board meeting on Thursday.
He added that the said glass factory was to be built near Makhachkala and it would be equipped with state-of-the- art equipment. Private investments would amount to about 30%.
Moreover, Dagestan’s authorities are already rendering assistance in allocating a plot of land and in building an infrastructure. Dagestan’s float glass factory’s capacity is to be 600 tons per day. The project provides for building a new high-technology production facility of various types of glass capable of meeting the construction industry’s needs in the Northern Caucasian, Southern, Volga and Central Federal Districts, the Press Office of the Russian Government was quoted as saying.
The glass factory would manufacture top-quality innovative products having unique energy-saving qualities – a 30% percent reduction in thermal losses in a cold period of the year and a 30-45% solar energy reduction in a warm period of the year.
A manufacturing technology is to be provided under a license of the world’s largest manufacturer of new extra-thin glass coatings, PPG Industries (the U.S.).
The project’s implementation is expected to create 300 new jobs and increase tax revenues in the budgets of all levels.
VEB to Buy out Svyaz-Bank’s Problem Loans for an Amount of 80-90 Billion Rubles, to Pay 8-9 Billion Rubles for them
Moscow. September 30. INTERFAX-AFI – Vnesheconombank is to buy out Svyaz-Bank’s (RTS: SVZB) problem loans for an amount of 80-90 billion rubles, Vnesheconombank Chairman Vladimir Dmitriev told journalists about it.
“After buying out this part of debts the balance sheet would be cleaned out of bad loans”, said Dmitriev after VEB’s Supervisory Board meeting. At the same time V Dmitriev said that the appraised value of this portfolio of bad loans was about 8-9 billion rubles. The appraised value between 8 and 9 billion rubles accounts for about 10%”, said Dmitriev.
VEB’s Supervisory Board was informed about the progress of this project’s implementation. V.Dmitriev added that talks with partner-banks on establishing a Postal Bank are still underway. He also added that a partner was most likely to be chosen at least in a month’s time. He explained it by the fact that proposals submitted to VEB by partners on September 15 did not meet all the requirements. VEB’s Chairman added that they discussed with partner-banks such issues as to how they would compensate for the Post of Russia’s loss of incomes because of its refusal to conduct financial transactions and as to how to compensate for VEB’s expenses on reorganizing Svyaz-Bank.
VEB to Choose a Partner for Establishing a Postal Bank on the Basis of Svyaz-Bank at Least in a Month’s Time
MOSCOW, September 30. /PRIME-TASS/. Vnesheconombank is to choose a partner for establishing a Postal Bank on the basis of Svyaz-Bank at least in a month’s time.
According to him, Nomos-Bank or Bank Russian Standard can become VEB’s partner.
V.Dmitriev didn’t specify possible dates of establishing a Postal Bank saying that Svyaz-Bank’s re-branding into a Postal Bank could take place in parallel with talks on searching for a partner.
According to V.Dmitriev, Vnesheconomank expects its potential partners to submit proposals on how and when to compensate the Post of Russia’s loss of incomes because it is to transfer a number of its financial transactions to a Postal Bank. And of course we would like them to disclose their stand on compensating for Vnesheconombank’s expenses on reorganizing Svyaz-Bank through using the Central Bank’s deposit”, said V.Dmitriev.
According to him, they have discussed the progress of implementing decisions on reorganizing Svyaz-Bank at Vnesheconombank’s Supervisory Board meeting. They stated that the measures taken by Vnesheconombank by way of using the Central Bank’s deposit worth 125 billion rubles helped to improve Svyaz-Bank’s financial indicators and secure its sustainable development. “These measures yielded tangible positive results”, noted V.Dmitriev.
Since the beginning of the year, the Bank has increased its loan portfolio by more than 40 percent. The amount of raised funds increased by more than 40 percent. The bank’s equity capital is about 45 billion rubles with capital adequacy ratio being more than 43 percent. This is quite a positive indicator enabling the bank to increase its transactions”, said V.Dmitriev.
RusAl to Repay Credit Worth $4.5 Billion to VEB within a Few Hours
MOSCOW. September 30. INTERFAX-AFI – VEB Chairman Vladimir Dmitriev told journalists that RusAl would repay its credit worth $4.5 billion, which it raised from Vnesheconombank in autumn of 2008 in the nearest time.
“I think it’s a matter of several hours, funds are available to refinance the debt in full’, said Dmitriev.
RusAl is planning to refinance its debt to VEB through raising a credit from Russia’s Sberbank.
Earlier, Sberbank President German Gref said that the credit could be refinanced in September.
V.Dmitriev said that that a key provision of the transaction model agreed upon by the three parties was that under no circumstances the mining and smelting plant’s collateral (Nornickel’s blocking stake owned by RusAl and pledged against VEB’s credit) was not to be alienated from the state.
In early August it became known that that Sberbank approved extending a credit worth $4.5 billion to RusAl for a period of up to December 2013 to refinance its debt to VEB. The sum of the credit approved covers the current debt of the Aluminum Company and capitalized interest.
In November 2008, RusAl raised a credit worth $4.5 billion from VEB to repay a loan obtained in April of 2008 from a syndicate of Western banks to purchase 25% +2 shares of the Norilsk Nickel Mining and Smelting Company. Last autumn VEB rolled over the credit for another year – until October 29, 2010.
Vnesheconombank is ready to explore the possibility of participating in the INTECO project in the Rostov region.
MOSCOW, September 30. /ITAR-TASS/. Upon receiving sufficient documentation on the construction of integrated home-building factories in the Rostov region by the INTECO Company, Vnesheconombank is ready to explore the possibility of participating in this project. Vnesheconombank Chairman Vladimir Dmitriev told journalists about it.
According to him, VEB continues to examine the materials made available.”In order to get divorced one should first get married”, Dmitriev commented on a number of publications in the mass media that wrote that VEB had got divorced with INTECO and would not participate in this project.
“We are examining the project on a routine basis”, said Dmitriev. As soon as we receive enough materials to examine the Rostov project thoroughly we’ll study them and make a decision in accordance with the established procedures”.
VEB’s Supervisory Board approved a proposal for a new remuneration system in the state corporation
Moscow. September 30. INTERFAX-AFI – Vnesheconombank’s Supervisory Board approved a proposal for a new remuneration system in the state corporation, VEB Chairman Vladimir Dmitriev told journalists about it.
“We also made a decision to approve a proposal agreed upon with the key financial and economic authorities for a system of financial indicators which would form the basis for VEB’s remuneration system”, he said at a briefing after Vnesheconombank’s Supervisory Board meeting.
Moreover, the Bank’s Supervisory Board approved regulations on a personnel and remuneration committee.
“We are forming a full-fledged management structure in line with the international banking standards. This structure is designed to manage Vnesheconombank as a state corporation”, he added.
V.Dmitriev said that all these decisions had been made without any linkage to a possible transformation of VEB into a joint stock company.
According to him, VEB’s proposals for employee remuneration were made on the basis of indicators of the five largest banks with state participation.
VEB is to provide sponsorship of 360 million rubles to Russia’s national hockey team
MOSCOW, September 30 – RIA Novosti. Vnesheconombank is to provide sponsorship of 360 million rubles in this season to Russia’s national ice-hockey team, Vnesheconombank Chairman told journalists about it.
According to him, the decision was taken on Thursday at the Bank’s Supervisory Board meeting conducted by Russian Prime Minister Vladimir Putin.
“Another decision I’d like to mention is the one on providing sponsorship of 360 million rubles to Russia’s national ice-hockey team. The funds are to be used to support the team in this season as well as to form the basis for our ice squad’s successful performance at the 2014 Winter Olympics”, said Dmitriev.
Vnesheconombank’s Regular Supervisory Board Meeting Held
Vladimir Putin's preliminary remarks:
Ladies and gentlemen,
Today we are holding a regular meeting of the Vnesheconombank Supervisory Board.
When we decided to reorganise VEB in 2007, we envisaged more than just another agency to develop and modernise the national economy.
I want to remind you that implementing international initiatives to develop infrastructure and launch innovations is undoubtedly one of Vnesheconombank's priorities.
I cannot but mention in this regard that a month ago VEB was elected to the Long-Term Investors Club, which brings together the largest and most authoritative government development banks of foreign countries.
I am confident that Vnesheconombank will make a worthy and constructive contribution to its work, and cooperation will benefit both the Russian economy and our partner countries.
A few days ago, VEB placed the first issue of ten-year Eurobonds to total $1.6 billion. As the bank CEO reported, demand greatly exceeds the offering, showing great confidence in the bank and readiness to invest in our country's key significant development projects.
VEB will be floating rouble bonds next and I hope they will be just as popular with investors, and these extra revenues from the domestic and foreign markets will help the bank to considerably increase the funds it generates for Russian industry.
Let us turn now to several items on today's agenda. We will consider the proposals for VEB to take part in lending money to new investment projects.
The comprehensive development of the Angara River's lower reaches in the Krasnoyarsk Territory is the most ambitious of these projects. It is one of the Siberian development strategy top priorities. The project envisages the construction of the Boguchany hydropower plant with a 3 hectowatt capacity, an aluminium plant and other industrial plants, and the necessary transport and social infrastructure.
The project will give practical results even within the year. I mean here the opening of the first unit of the Boguchany hydropower plant, which is scheduled to reach full capacity in 2013, when the Boguchany aluminium plant is also to open.
Vnesheconombank plans to invest 50 billion roubles in their construction. The power plant requires 28.1 billion and the aluminium plant 21.9 billion. Railway and highway construction will begin next.
I want to mention another energy project. VEB will take part in financing the construction of the Adler thermal power plant, part of the Olympic preparations in Sochi. The bank has earmarked 19.5 billion roubles for it, while overall plant construction costs are estimated at 28 billion roubles. Due to open before the end of 2012, the plant will produce 360 megawatts.
Last but not least, the decision has been made to establish a special export credit insurance agency, affiliated to Vnesheconombank. It will become one of the pivotal bodies in the national export promotion system, and will have an emphasis on machinery, equipment and other high-tech commodities and services.
As I know, a wide range of opinions have been advanced here on how to organise the agency's work, and it is good that we have come to an agreement on its principles.
Let us get down to business.
On Vnesheconombank’s Supervisory Board Decisions
VEB’s Supervisory Board approved financing a number of projects
Moscow, June 29. INTERFAX - The Supervisory Board of Vnesheconombank (VEB) at the session on Wednesday approved a number of large-scale projects, Vladimir Dmitriev, Chairman of the Bank, informed the journalists. In particular, according to his words, the financing required to complete the construction of the Boguchansk hydroelectric power station and the aluminium plant was approved. “After the approval by the Supervisory Board, VEB will start its financial support for these projects’ implementation – overall, about RUB 50 billion will be invested by VEB”, said V. Dmitriev.
He reminded that these projects are implemented adopting a PPP approach, with the state and the territorial administrations undertaking the construction of the infrastructure – both road and social.
“Concerning one of these projects, he added, should the “Russian Railroads” and the Krasnoyarsk territory be unable to finance the infrastructure, VEB would be prepared to resolve the issue”, said V. Dmitriev.
To quote Mr. Dmitriev, presently all the schemes securing project viability have been developed and well tested with the instruments designed to minimize VEB’s risks put in place.
“As far as the Boguchansk hydro-electric power station and the aluminium plant are concerned, these are the projects where the term of funds allocation actually exceeds 15 years”, said V. Dmitriev.
In this case, he pointed out, complicated transactions have to be appropriately structured since long-term funds either in rubles or in foreign currency are not presently available.
Besides, the issue of continuing the financing of Vladivostok airport was another topic on the Supervisory Board agenda.
“Today the decision has been made to extend additional RUB 900 million to finance this project” said V. Dmitriev.
Also, the parameters of further financing the “Rosa Khutor” company have been agreed. (the construction of a mountain skiing resort in Sochi is underway).
“We continue financing and bring project parameters in conformity with the terms and conditions approved by the Supervisory Board for projects implemented in the run up to the Olympic games, I actually mean the interest rates”, Mr. Dmitriev specified.
Another important project is financing the construction of the Adler heat and power plant.
“The volume of financing amounts to almost RUB 20 billion, the term - 15 years, the rate well within the range of ones applicable for Olympic facilities. The same is true for the ratio of project initiator funds/credit leverage of Vnesheconombank”, said V. Dmitriev.
To quote the Russian Government Chairman Putin, an export credit insurance agency will be established within VEB’s structure.
Moscow, June 29. INTERFAX – V. Putin, the RF prime minister, unveiled plans to establish Vnesheconombank’s subsidiary – an export credit insurance agency.
“A decision has been prepared to create a specialised export credit insurance agency, VEB’s subsidiary, called to become one of the key elements of the exports support system”, said V. Putin at the meeting of VEB Supervisory Board on Wednesday.
He emphasized, the focus will be primarily placed on moving Russian-made machinery and equipment and other high tech goods to foreign markets.
After the session of the Supervisory Board, V. Dmitriev, VEB’s CEO, told the journalists that VEB would extend RUB 30 billion for the agency for its start up operations.
“The Agency is being created as a 100% subsidiary of VEB, and the Bank allocates RUB 30 billion for the Agency to launch its operations. Admittedly, in 2010, no state guarantees will be needed for the implementation of the first projects of the Agency”, he said.
VEB is considering issuing RUB 190 billion 20-year bonds.
Moscow. June 29. INTERFAX-Financial Information Agency – Vnesheconombank (VEB) is considering issuing 10-year bonds amounting to RUB 190 billion - V. Dmitriev, VEB’s CEO reported at the briefing on Wednesday.
“This program was also approved (by VEB’s Supervisory Board – the notes of Financial Information Agency). These are 10-year bonds amounting to RUB 190 billion”, he said and pointed out that VEB does not intend to place the whole amount all at once.
VEB’s CEO stressed that the first bond issue within the frames of this program is scheduled to be placed in autumn 2010. “The placement could be made already in autumn”, he added.
VEB agreed with “Svyazinvest” proposal related to the sale of 9.8% of shares of “Rostelecom”.
Moscow. July. INTERFAX – Financial Information Agency – VEB agreed with “Svyazinvest” proposal related to the sale of its 9.8% stake in “Rostelecom” (RTC: RTKM),V. Dmitriev, VEB’s CEO, informed to journalists.
“We have agreed the major parameters of the option agreement with “Rostelecom”. We agreed with “Svyazinvest” that this package will be purchased on a break-even condition”, he said.
V. Dmitriev pointed out that within this transaction two options could be exercised in three and four years. He reiterated that “Svyazinvest” will buy “Rostelecom” shares with due regard for the price at which VEB bought them, that is RUB 230 per share.
Sberbank refinances RusAl’s loan raised from VEB amounting to USD 4.5 billion – said Dmitriev.
Moscow. July 28. INTERFAX – Financial Information Agency – Sberbank of the Russian Federation refinances the RusAl’s loan amounting to USD 4.5 billion raised from VEB – said V. Dmitriev, VEB’s CEO, at the briefing on Wednesday.
“Today the parameters of the transaction were agreed. Sberbank undertakes to secure the refinancing”, he said and pointed out that the risks will be equally apportioned between Sberbank and VEB.
V. Dmitriev added that VEB will act as a pledge holder and a guarantor under this loan.
“The pledge (major package of shares of “Nornikel” – notes by Financial Information Agency) is to be equally divided between Sberbank and VEB”, he said.
According to Mr.V. Dmitriev’s judgment, the block of shares of “Nornikel” will remain under state control till the agreement terminates.
As it was reported earlier, “RusAl” requested Sberbank of the Russian Federation to refinance a loan amounting to USD 4.5 billion. German Gref, Sberbank’s CEO, declared that the transaction on refinancing the loan to “RusAl” will be implemented by Sberbank jointly with VEB.
Vnesheconombank’s Regular Supervisory Board Meeting Held
Russian Prime Minister V.V.Putin Conducts a Meeting of Vnesheconombank’s Supervisory Board
The Premier said that although in 2009 VEB diverted considerable funds for implementing crisis management measures; it also carried on operating as the Bank for Development. V.V. Putin expressed confidence that in 2010 VEB’s financial resources would be used most effectively to technologically upgrade Russian industries and generate additional demand for innovations.
V.V. Putin’s opening address
Good afternoon esteemed colleagues. Let’s start Vnesheconombank’s Supervisory Board meeting.
First, we are to approve the report on the bank’s performance for 2009. And here I’d like to underline a very important point. The Bank spent considerable resources to implement crisis management measures and in this respect I’d like to say that these measures were quite successful.
At the same time, VEB carried on operating as the Bank for Development. Its investment loan portfolio increased by 77% to 230 billion rubles. Due to the Bank’s financial support 24 new projects were started in power engineering, agriculture and a number of other sectors. VEB launched a 250 billion ruble program to support mortgage lending. This also enabled commercial banks to reduce interest rates on mortgages. Sberbank President German Gref told me that Sberbank had abolished all bonuses and cut mortgage interest rates by 3% on average.
VEB provided considerable support worth 40 billion rubles to small and medium-sized enterprises. And in this respect I would like to say today that VEB’s overall performance can be assessed as positive.
In 2010, Vnesheconombank should also place main emphasis on preparing new investment projects, some of which we’ll discuss today.
For example, we have been offered to extend a long-term credit to build a modern timber deep processing integrated facility at the port of Vanino in the Khabarovsk Territory.
To my best knowledge, the project’s initiators have completed the first stage from the ground up in mid 2009.The second stage is to be completed in the second quarter of 2010.
Vnesheconombank is completing an eleven-billion ruble loan to finance the construction of the third stage, which is expected to increase production facilities and create 500 new jobs.
It should be noted that the investment in timber processing was not VEB’s first investment in the region, specifically, at the port of Vanino. In 2009, the construction of a new sea coal terminal with a designed export capacity of 12 million tons of coal started in Vanino.
Meanwhile, RAO RZhD is actively renovating the railway line from Vanino to Komsomolsk-on-Amur. Recently we held a meeting to discuss the project’s implementation. One of the most important elements of the project is to reconstruct and renovate the Kuznetsovsky Tunnel. It was built as early as in 1945. The new railway line would make it possible to use the Baikal-Amur Mainline to its full capacity.
It is obvious that it is this comprehensive approach to developing territories, infrastructure and natural resources that ensures sustainable development of the Far East in the most effective way.
Let me mention one more transport project. Vnesheconombank is to finance the purchase of two ice-class tankers. These are modern tankers, which our transport companies need badly. They are designed to transport oil produced offshore in the Barents Sea.
The first tanker, Mikhail Ulyanov, has been already delivered to the customer, Sovcomflot. The other tanker, Kirill Lavrov, has been launched and is due to be commissioned soon.
Vessels of this class haven’t been built in Russia before. They were built with the use of cutting-edge technology and breakthrough innovations. That is to say, VEB’s financial resources will be used to technologically upgrade Russian industries, in this particular case shipbuilding, and will generate additional demand for innovations.
It is these projects that we should focus in the future.
Let’s proceed to our discussion.
Origin: Internet Portal of the Government of the Russian Federation
On Decisions Taken by Vnesheconombank’s Supervisory Board
VEB’s profit for 2009 will be used to finance its activity – Dmitriev
NOVO-OGAREVO, May 26 - RIA Novosti. Vnesheconombank’s profit for 2009 will be fully allocated to the state corporation’s funds and used to finance its activity, Vnesheconombank Chairman Vladimir Dmitriev told journalists on Wednesday after the meeting of the state corporation’s supervisory board.
“The profit has been fully allocated to the Bank’s funds and will be used to finance Vnesheconombank’s activity”, said Dmitriev reminding that VEB’s profit for 2009 was 31 billion rubles.
The state corporation’s profit for the first quarter exceeded 20 billion rubles. Dmitriev said that if a decision to reduce interest rates on subordinated loans extended by VEB to Russian banks as part of crisis management measures was taken, the state corporation’s profit from such loans would be reduced by two thirds.
According to him, in terms of profit amount for 2009 the state corporation came out on top among other banks. In terms of profit amount for the first quarter of 2010, the Bank took second if not first place. Reportedly, Vnesheconombank’s net profit for January-March of 2010 was 23.1 billion rubles against 1.1 billion in the same period of 2008.
The Bank’s assets amounted to 1.8 trillion rubles and Vnesheconombank is among the third largest Russian banks.
Dmitriev reminded that incomes of 175 billion rubles from transactions with securities were reinvested and were committed for achieving core objectives.
VEB’s Supervisory Board approves the Bank’s participation in projects worth almost 500 Million Euros
NOVO-OGAREVO, May 26, /ITAR-TASS/. Today, VEB’s Supervisory Board approved the Bank’s participation in projects worth almost 500 million euros. Vnesheconombank Chairman Vladimir Dmitriev told journalists that the financing amount for the construction of tankers would be about 240 million euros and that another 250 million euros would be used to finance the construction of a timber processing factory.
VEB will participate in funding the project aimed at purchasing and operating Arctic shuttle tankers by Sovcomflot. The tankers are designed to ship oil, oil products and gas condensate. The main prospective transport route is the Prirazlomnoye oil field /the Pechera Sea/ - Western Europe. Before the start of the oil field’s exploitation, the tankers are expected to be used for shipping liquid hydrocarbons along the shipping line from ports of the Baltics to ports of Western Europe.
A timber processing integrated plant manufacturing chipboards and sawn timber is planned to be built in the Vanino district of the Khabarovsk Territory with a timber processing capacity of up to 1.1 million cubic meters per year. The project is aimed at enhancing natural resources utilization efficiency, promoting Russian industrial exports and boosting the region’s socio-economic development.
VEB to provide Sovcomflot with 240 million euros for purchasing Arctic tankers
Novo-Ogarevo. May 26. INTERFAX-AFI – Vnesheconombank (VEB) is to provide Sovcomflot with 240 million euros for purchasing and operating Arctic vessels designed to ship oil, oil products and gas condensate, VEB Chairman Vladimir Dmitriev told journalists.
V.Dmitriev said that that the Bank’s Supervisory Board approved the Bank’s participation in financing this project on Wednesday.
VEB’s Chairman said that this project was to be financed as part of Vnesheconombank’s leasing business. These vessels are planned to be bought out by VEB-Leasing and then let on time charter to Sovcomflot and Gazprom (PTC: GAZP).
These vessels are planned to be used for shipping oil and gas from the Prirazlomnoye Arctic oil field (the Pechora Sea). But even before the Prirazlomnoye oil field starts to operate, these vessels will be used in other projects. “Even now there is a contract for shipping oil from Murmansk to China”, said V.Dmitriev.
Two tankers Mikhail Ulyanov and Kirill Lavrov were built by the order of Sovcomflot at the shipyards in Saint-Petersburg. The first tanker, Mikhail Ulyanov, has been already delivered to the customer and the second tanker, Mikhail Lavrov, is due to be commissioned in the middle of this year. These vessels’ deadweight is 70 thousand tons.
Sovcomflot is one of the world’s largest maritime shipping companies specializing in natural resources shipping including by Aframax class tankers, petrochemical tankers and ice class tankers. It is a 100% state-owned corporation.
The Company’s earnings under the International Accounting Standards fell by 25% to $1.2 billion in 2009. Net profit almost halved to $217 million.
The Company’s fleet increased by 17 vessels in 2009, including 5 Suezmax-Class tankers and 4 Aframax-Class tankers, to 144 vessels with the total deadweight of 10 million tons.
V.Dmitriev believes that Tractornye Zavody’s debts can be restructured and then Vnesheconombank can finance its investment projects
NOVO-OGAREVO, May 26. /PRIME-TASS/. Vnesheconombank Chairman Vladimir Dmitriev believes that Tractornye Zavody’s debts can be restructured and then Vnesheconombank can finance its investment projects. He told journalists about it after the Bank’s Supervisory Board meeting where they discussed restructuring Tractornye Zavody’s debts.
“In our opinion and in accordance with the decisions taken by our Supervisory Board an issue of restructuring debts to commercial banks would be dealt with appropriately. Taking into account commercial banks’ positions, Vnesheconombank considers it possible to restructure the corporation’s debts and provide funds for implementing the corporation’s investment projects”, said V.Dmitriev
Vnesheconombank’s Supervisory Board Regular Meeting Held
Russian Prime Minister V.V. Putin Conducts a Meeting of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board
As V.V. Putin said at the meeting that the Bank for Development was one of the most important participants in implementing the Government’s crisis management measures and made it possible to provide urgent assistance to the banking sector, the stock market and system-forming enterprises of the real economy. The Prime Minister also added that Vnesheconombank did its best to help its borrowers by extending balanced interest rates on credits, restructured former debts if required and acted guided by long-term objectives of Russia’s economic development.
V.V. Putin’s Opening Address
Esteemed Colleagues, today we’ll hear out Vnesheconombank’s report for 2009, approve its budget parameters for 2010 and consider a number of projects in which Vnesheconombank participates.
I’d like to say that in 2009, the Bank for Development was one of the most important participants in implementing the Russian Government’s crisis management measures, made it possible to provide urgent assistance to the banking sector, the stock market and system-forming enterprises of the real economy. The Bank’s employees performed this intensive work professionally. They carried out decisions efficiently and timely and provided the Government with considerable expert support.
Many measures carried out with the Bank’s assistance have already achieved their objectives and have been suspended and all the funds committed by the state have been returned in full. For example, VEB has already returned 175 billion rubles to the National Wealth Fund. The Bank used the funds to support the Russian securities market in the most difficult period in autumn of 2008, and in doing so it paid interest on them to the federal budget.
Additional incomes from these transactions in the amount of 54.7 billion rubles would be largely used to implement the plan that we announced under the affordable mortgage lending program.
The program aimed at refinancing Russian companies’ debts to foreign creditors was also carried out in accordance with the existing plans. I’d like to remind you that we had performed this work in order to prevent Russian companies’ strategic assets from being diverted to foreign financial institutions due to refinancing problems under the conditions of the global financial and economic crisis. Well, then, the borrowers have already returned 4 billion rubles to VEB out of more than 11 billion they had received.
In general, VEB is taking an active part in stabilizing the banking system. The total amount of subordinated loans extended by the Bank of Development to other credit institutions was 404 billion rubles. Thanks to these loans, commercial banks received additional resources for financing the real economy.
Moreover, Svyaz-Bank’s and Globex Bank’s solvency was restored. The banks were placed under VEB’s control when they were virtually in a state of bankruptcy. At present, Vnesheconombank’s specialists are implementing strategies of their development. Specifically, today we are going to be told about the choice of a partner bank for a new project aimed at establishing a Postal Bank on the basis of Svyaz-Bank jointly with the Post of Russia.
Vnesheconombank participated directly in the financial restructuring of a number of major companies such as the United Aircraft Building Corporation and the Amurmetall Plant. VEB contributed 21 billion rubles to the United Aircraft Building Corporation’s charter capital and became an owner of 11% of its shares. And in December of 2009, an Agreement was signed on financing the Amurmetall plant for an amount of 2.2 billion rubles. The first tranche of 400 million rubles has been already transferred.
And I’d like also to say that despite the additional workload associated with crisis management measures Vnesheconombank carried on undertaking its core activity as a Bank for Development.
The amount of newly extended credits to the real economy was 123 billion rubles. The Bank extended guarantees worth 34 billion rubles under the innovative products support program. In 2009, 40 billion rubles were committed to small and medium-sized enterprises.
VEB started to finance such meaningful projects as the reconstruction of the Koltsovo airport in Yekaterinburg, the construction of an export terminal for coal transportation in the port of Vanino in the Far East and the construction of the Urengoy Electric Power Station in the Tyumen region.
Vnesheconombank is taking an active part in financing Olympic facilities.
Another important point to mention is that Vnesheconombank did its best to help its borrowers by extending balanced interest rates on credits, restructuring former debts if required and acted guided by long-term objectives of Russia’s economic development.
In doing so, Vnesheconombank performed pretty well, formed sufficient significant reserves to maintain its financial sustainability. In 2009, the Bank’s net profit amounted to 31 billion rubles. This is quite comparable to our leading credit financial institutions such as, for example, Sberbank.
It’s evident that it’s high time today to boost activities related to post-crisis economic recovery and modernization to support innovations and high-technology exports.
Our today’s agenda includes a number of such issues. In particular, we have to approve the opening of a credit line to finance the construction the Ekibastuz Power Station’s third power unit.
I’d like to stress that VEB’s credit resources in the amount of 12 billion dollars would be used to purchase domestic power-engineering equipment and it means that we’ll provide the Russian machine-building complex with guaranteed orders.
Moreover, the implementation of this project would help to reintegrate the energy systems of Northern Kazakhstan and Russia’s Southern Siberia and create additional opportunities for these regions’ comprehensive development.
Our next investment project is aimed at constructing a polypropylene manufacturing complex in Tobolsk. This is a large-scale strategic complex influencing directly the future of our chemical industry by raising its technological level and expanding opportunities for deep processing of raw materials.
We’ll also discuss the strategy of Vnesheconombank’s participation in upgrading the Sheremetjevo Airport.
Let’s get started with our work.
On Decisions made by Vnesheconombank’s Supervisory Board
VEB expects net profit in 2010 of about 20 billion rubles
Moscow, March 31, INTERFAX – VEB expects net profit in 2010 of about 20 billion rubles under Russian accounting standards, VEB Chairman Vladimir Dmitriev said following a meeting of the Bank’s Supervisory Board.
Moreover, the Supervisory Board approved opening a 12-billion ruble credit line for the Ekibastuz State District Power Station to support Russian exports of power engineering equipment.
Vnesheconombank selects partners for establishing a Postal Bank on the basis of Svyaz-Bank
NOVO-OGAREVO, March 31, /PRIME-TASS/. Vnesheconombank has selected partners for establishing a Postal Bank on the basis of Svyaz-Bank (SVZ01), Vnesheconombank Chairman said following a meeting of the Bank’s Supervisory Board.
According to him, Vnesheconombank has selected UniCredit Bank, Russian Standard Bank, Nomos-Bank (NMOS03) along with HomeCredit Bank to further participate in this project.
V.Dmitriev said that within a period of 3 months a financial model for creating a Postal Bank would be provided and Vnesheconombank would decide on its main partner in implementing this project.
On approving Vnesheconombank’s participation in the construction of a polypropylene complex in Tobolsk
Moscow. March 31. INTERFAX – VEB’s Supervisory Board approved on Wednesday an investment application for constructing a polypropylene production complex in Tobolsk, VEB Chairman Vladimir Dmitriev told journalists about it.
According to him, the total amount of financing the program of constructing an associated petroleum gas processing gas-chemical plant would be 1.5 billion dollars.
Speaking about this complex earlier, Russian Prime Minister Putin said that “it was a major strategic project directly influencing the future of our chemical industry, increasing its technological level and boosting the potential for deep processing of raw materials”.
On making a decision on centralized management of Terminal D in Sheremetjevo and creating a single operator
NOVO-OGAREVO. March31. /PRIME-TASS/. Vnesheconombank’s Supervisory Board made a decision to centralize the management of terminal D in the Sheremetjevo airport and create a single operator. Vnesheconombank Chairman Vladimir Dmitriev told journalists about it following a meeting of VEB’s Supervisory Board.
He said that Vnesheconombank would participate in financing the creation of a major hub.
V.Dmitriev added that consultants would determine a model of unifying the existing legal entities involved in the management and that a single operator would be created to be responsible for managing Terminal D and the Sheremetjevo airport.
V.Dmitriev added that the financial model examined preliminarily gave us real confidence that the current debt of 1.5 billion would be serviced and repaid.
He added that a consultant to assist in determining a financial unification model has not been identified.
Answering a question if VEB would be able to get a stake in exchange for debts in Sheremetjevo V.Dmitriev said that they were not discussing this issue for the time being. In his opinion the debt could be restructured but this possibility would be considered in the course of working out a financial unification model.
VEB is close to signing an agreement on restructuring debts of Tractornye Zavody Corporation.
NOVO-OGAREVO, March 31. /PRIME-TASS/. Vnesheconombank is close to signing an agreement on restructuring debts of Tractornye Zavody Corporation. Vnesheconombank Chairman Vladimir Dmitriev told journalists about it following a meeting of VEB’s Supervisory Board.
He also added that today Vnesheconombank’s Supervisory Board approved its participation in the toll motorway Moscow – St. Petersburg (section 15-58 km) construction project. According to him, VEB will participate in this project together with Sberbank (SBER), both banks’ stakes in this project are equal.
On Vnesheconombank’s Supervisory Board Decisions
Under the Program of Vnesheconombank’s Investments in Affordable Housing Construction and Mortgage Lending Projects in 2010-2012, the Supervisory Board approved the mechanism for refinancing mortgage credits through investing a funded portion of the labour pension and Vnesheconombank’s own funds in mortgage-backed bonds in order to encourage mortgage lending and make it more affordable to the general public. A decision was also taken to invest funds in the total amount of 250 billion rubles on the following terms:
Vnesheconombank’s own funds to be invested in mortgage-backed bonds in the amount of up to 50 billion rubles at a coupon rate of 3% per annum under the bonds at prices no more than the par value;
Pension savings funds managed by Vnesheconombank acting as the state trust management company to be invested in mortgage-backed bonds in the amount of 100 billion rubles at a coupon rate of no more than9% per annum under the bonds at prices no more than the par value;
Pension savings funds managed by Vnesheconombank acting as the state trust management company to be invested in the Housing Mortgage lending Agency’s bonds guaranteed by the state in the amount of up to 60 billion rubles at a coupon rate to be set on the basis of market conditions;
Funds of the National Wealth Fund to be committed to Vnesheconombank subject to Federal Law dated October 13, 2008, №173-FZ to finance the Housing Mortgage Lending Agency’s credit line in the amount of up to 40 billion rubles at an interest rate of 9.5% per annum for a period of up to June 1, 2020.
A decision was made to approve “Requirements to Bonds including Mortgage Backed Bonds and to Mortgage Coverage of Bonds to be Purchased under the Program of Vnesheconombank’s Investments in Affordable Housing Construction and Mortgage Lending Projects in 2010-2012”.
A decision was made to approve “The Procedure for Cooperation between State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’, the Housing Mortgage Lending Agency, Vnesheconombank’s Investment Company (VEB Capital) and Credit Institutions and Mortgage Agencies in Implementing the Program of Vnesheconombank’s Investments in Affordable Housing Construction and Mortgage lending Projects in 2010-2012”.
The Supervisory Board approved extending guarantees as a security of VEB Capital’s liabilities under Agreements on Providing Services on Arranging Bond Issues to be concluded under the Program in favor of mortgage- backed bonds issuers for a total amount of 150 billion rubles with a validity period of no more than three years. Terms of issuing Vnesheconombank’s guarantees, changes in the terms and other terms of the Bank’s participation in this project are to be approved by Vnesheconombank’s Management Board.
VEB Capital together with the Housing Mortgage Lending Agency were assigned to prepare a format for reporting on the progress of extending housing and mortgage credits under this Program to be submitted for consideration by the Supervisory Board.
Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
On Decisions Taken by Vnesheconombank’s Supervisory Board
The following decisions were taken at Vnesheconombank’s Supervisory Board meeting on December 17, 2009:
Vnesheconombank’s Supervisory Board approved the strategy of OJSC Svyaz-Bank’s development. The strategy provides for establishing a Russian Federation Post Bank with the participation of the Post of Russia and a partner bank. The Board decided to form a working group comprised of representatives of interested ministries, the Bank of Russia, the Post of Russia and Vnesheconombank to prepare a complex of events to set up a Post Bank.
The Board made a decision providing for Vnesheconombank to extend a subordinated loan worth 16 billion rubles to OJSC Svyaz-Bank under Federal Law № 173 “On Additional Measures for Supporting the Financial System of the Russian Federation”.
The Supervisory Board acknowledged the report on Vnesheconombank’s activity on extending subordinated loans to Russian lending institutions under Federal Law № 173 “On Additional Measures for Supporting the Financial System of the Russian Federation”. This program is acknowledged as having been completed.
Vnesheconombank’s Supervisory Board agreed upon purchasing the OJSC United Aircraft Corporation’ shares by Vnesheconombank for an amount of up to 21 billion rubles.
The Supervisory Board approved Vnesheconombank’s participation in financing the project aimed at reconstructing and modernizing the Khabarovsk Oil Refinery. The project’s total value is 1.3 billion US dollars. The Project is to be financed through using Vnesheconombank’s credit resources and shareholders’ own funds. Vnesheconombank’s credit is to be fully refinanced by the Spanish Export Insurance Agency CESCE.
The Board made required decisions providing for Vnesheconombank jointly with SNC-Lavalin to create a specialized engineering company VEB-Engineering (LLC) to monitor investment projects of national significance implemented by Vnesheconombank.
The Board made required decisions to establish a specialized VEB Capital Company (LLC) designed to effectively manage Vnesheconombank’s assets.
Origin: Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
Vnesheconombank’s Supervisory Board Regular Meeting Held
V.V. Putin’s Opening Address
Good afternoon, Esteemed Colleagues!
At today’s Vnesheconombank’s Supervisory Board meeting we’ll hear out a report on implementing the Government’s crisis management measures and discuss a number of new investment projects.
As you know, Vnesheconombank played a prominent role in supporting our country’s banking system in the crisis period and continues to play this prominent role. The Bank also extended subordinated loans worth 388 billion rubles to 16 commercial banks that went through a selection procedure and undertook to increase financing amounts to end borrowers at interest rates affordable for enterprises.
Our latest arrangement was the Central Bank’s refinancing rate plus three percent. I am not sure that all this was effective and implemented in due time but I nevertheless hope this played a positive and stabilizing role in the most difficult period of time.
Given that subordinated loans were extended for a period of 10 years, these additional financial resources would support business activity in the economy in the future.
In this respect, I’d like to place particular emphasis on the Government’s joint efforts designed to support the country’s banking sector in the crisis period. As opposed to the said events during the 1988 crisis we succeeded in preventing the collapse of the banking system and bankruptcy of our largest financial institutions. I think that everybody remembers quite clearly that in 1988 all the largest commercial banks that looked like giants and absolutely reliable giants, namely, Incombank, Imperial, ONEXIM Bank all but ceased to exist.
I think that owners did not suffer much but depositors, citizens lost a considerable part of their deposits in these financial institutions. We managed to prevent this worst-case scenario and supported all those who were viable. We defended the interests of depositors and above all citizens of the Russian Federation.
And those banks that proved to be in the most complicated situation and failed to overcome this complicated situation on their own – there were 18 such banks – were transferred for a symbolic payment, sometimes for 1 ruble, into the state system of the Deposit Insurance Agency.
This measure is designed to reorganize these financing institutions, to consolidate them and create viable banking institutions for them to be able to continue working normally with economic players, with natural and legal entities.
Today, we have to determine the future of Svyaz-Bank.
Like a number of other lending institutions it failed to resolve on its own the problems that emerged. And for this reason, it was transferred under Vnesheconombank’s management. Vnesheconombank fully restored the Bank’s solvency for a short period of time.
Our task now is to work out a strategy of Svyaz-Bank’s development as well as terms on which we are ready to engage partners into this project.
Moreover, we have to take a decision on committing 21 billion rubles to the United Aircraft Construction Corporation’s charter capital. We have been discussing this issue for a long time, it took several months to prepare the decision, it was thrashed out thoroughly and we should take it today.
This is targeted money designed to financially rehabilitate the company and enable it to make payments to its creditors and suppliers.
At the start of the next year, the company is to receive additional 10.7 billion dollars from the federal budget. And this money will be used not to fill in the gaps but to manufacture new civil aircraft, domestic aircraft.
We’ll also consider proposals for financing a new investment project in the Far East; this project is aimed at reconstructing the Khabarovsk oil refinery.
There are plans to fully upgrade this production facility, which is of great importance for the region, and introduce there the most advanced and environmentally friendly technologies and make it possible to manufacture engine fuel meeting the highest standards: Euro-4 and higher. The project’s total value is 1.3 billion dollars.
I would like to remind you that at our previous Supervisory Board meetings we made decisions on establishing Vnesheconombank’s subsidiary institutions to manage its assets as well as a specialized engineering company. Its main task is to conduct expert’s examination of project documentation, monitor thoroughly the implementation of investment projects and, if necessary, take measures against non-targeted and inefficient use of Vnesheconombank’s credit resources.
Today, we’ll discuss and approve documents that will make it possible for VEB-Capital and the engineering company to start operating.
On Vnesheconombank’s Supervisory Board Decisions
NOVO-OGAREVO, November 19 – RIA Novosti. At its meeting on Thursday, Vnesheconombank’s Supervisory Board considered an issue of the State Corporation’s possible participation in the coming Rusal’s IPO but the information on the decisions taken is confidential and will not be made public, Vnesheconombank Chairman Vladimir Dmitriev told journalists.
“We considered this issue and certain decisions were made. Any information on placing shares is confidential”, said Dmitriev at the end of VEB’s Supervisory Board meeting conducted by its Chairman –Russian Prime Minister Vladimir Putin.
“Any information on this account that gets into the mass media does not have anything to do with VEB”, said the Chairman of Vnesheconombank.
The Russian aluminum giant’s IPO is to be held until this year-end. Rusal’s shares are to be placed on the Hong Kong Stock Exchange and the Paris Euronext. The Company plans to sell 10% of its shares believing that it would raise 2.5 billion dollars through this IPO.
Earlier, the source close to Rusal told RIA Novosti that the Company stood a very good chance of reaching a final agreement on restructuring its debts to the consortium of foreign banks until November 19 - a critical date in terms of being able to hold IPO in the current year. Nevertheless, Rusal did not say that it had signed such an agreement.
VEB’s Supervisory Board decides to expand financing of mortgage lending through using pension funds
Moscow. November 19. INTERFAX-AFI – Vnesheconombank’s (VEB’s) Supervisory Board made a decision to expand the program of financing mortgage lending through using pension funds under the Bank’s management, VEB Chairman Vladimir Dmitriev told journalists after the Bank’s Supervisory Board meeting.
“A substantial part of about 470 billion rubles under VEB’s current management might be used to finance mortgage lending”, said V. Dmitriev.
According to him, VEB is expected to receive funds from the Russian Pension Fund in the first quarter of 2010. As a result, according to VEB’s Chairman, the total amount of pension funds under the Bank’s management would be 690 billion rubles.
“Taking into account limitations on investing funds in certain types of bonds, that is, 70% of one issue (in this case mortgage bonds) and no more than 20% of the total investment portfolio, we believe that the amount of mortgage lending would be significantly increased.
Moreover, he said the Bank’s Supervisory Board had also considered an issue of financing mortgage lending through using incomes generated by VEB through using financial resources of the National Wealth Fund.
V. Dmitriev said that through financing mortgage lending by VEB, interest rates on mortgage could be reduced and credit periods could be increased.
Vnesheconombank’s Supervisory Board Regular Meeting Held
Russian Prime Minister V.V. Putin Conducts a Meeting of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board
V.V Putin’s Opening Address
Good afternoon, Esteemed Colleagues!
At today’s Vnesheconombank’s Supervisory Board meeting we’ll discuss the Bank’s participation in boosting mortgage housing lending. Today we’ll consider an issue of financing mortgage lending. And not a word about football. We’ll discuss ways of how we can help to finance housing construction in the Russian Federation through using Vnesheconombank’s capabilities. I’d like to remind you that despite the problems caused by the economic crisis, mortgage lending is still one of the most effective and affordable ways of purchasing housing in many countries of the world. It was also in great demand by Russian citizens.
Starting in 2005 and up until now, the amount of mortgage housing lending has increased manifold, for example, in 2005 the amount was 60 billion rubles and in 2008 it was 630 billion rubles.
Of course, the crisis changed the situation in mortgage lending. Since autumn of 2008, the amount of mortgage loans extended has fallen substantially and the terms of obtaining mortgage loans have significantly worsened. Factually, mortgage loans have become unaffordable for an absolute majority of Russians.
In this situation our top priority was to support those who came up against problems of financing and who could not repay loans. Eighty thousand families have used the so-called maternity capital to fully or partially repay their mortgage loans. I’d like to remind you that maternity capital could be used from January 1, 2009, rather than from 2010 as planned. We also implemented the plan of allowing people to defer payments on mortgage loans. Both the Mortgage Housing Lending Agency and private banks, factually, with our Bank’s support participated in implementing this plan.
At the same time, while addressing day-to-day problems we should think about a post-crisis recovery of the mortgage sector. The more so, we can now see that people’s interest in applying for mortgage loans is growing.
Banks have started to expand mortgage business; they are reducing the size of down payment and interest rates on their mortgage loans.
Of course, 14.5% - an average interest rate on mortgage loans is too high for Russian citizens. Incomes in Russia are not high enough to pay such high interest rates. For mortgage loans to become affordable for a wide range of people we should try to reduce interest rate on such loans to 10-11%.
We can’t make it happen through giving directive instructions, this is an economic process but we should do our best to achieve this. And I suggest that we should discuss today ways of reinforcing the current trend for reducing interest rates on mortgage loans.
We are well aware that all over the world pension funds are used as an instrument for securing long-term credit resources.
Here I mean the amount of pension savings funds managed by Vnesheconombank, we might think about using these instruments in our country, of course, very carefully, with maximum guarantees.
Pension savings funds worth 690 billion rubles are currently managed by Vnesheconombank.
A month ago the Government approved a new strategy of investing pension savings funds managed by Vnesheconombank. Up to 20% of these funds or some 100 billion rubles can be invested in mortgage bonds of Russian banks.
So, banks will be able to extend new mortgage loans within this amount at more affordable interest rates and for longer periods. And by financing these loans, VEB should in fact act as a bank for development.
I know that the state bank’s attitude to this is anything but simple because mortgage loans do not generate high incomes but still it is a key function of this financial institution.
I suggest that we should discuss available options and practical steps VEB can make to implement these plans. We’ also discuss some other routine issues. Let’s proceed to the issues on our agenda.
Vnesheconombank Chairman Vladimir Dmitriev’s Briefing on the Results of Vnesheconombank’s Supervisory Board Meeting
TV Channel Vesti-24
HOST: Now Vnesheconombank Chairman Vladimir Dmitriev’s briefing is starting at the House of Government. Our channel is telecasting the briefing live.
Vladimir DMITRIEV, Vnesheconombank Chairman: At our Supervisory Board meeting we discussed an issue of developing Vnesheconombank’s subsidiary banks and above all GLOBEX and Svyaz-Bank. We also discussed banks incorporated in Vnesheconombank as development institutions – Roseximbank and the Russian Development Bank. We approved their core activities as a whole. Having been reorganized such commercial banks as Svyaz-Bank and GLOBEX started to operate on a break-even basis. It is safe to say that they started to develop in a sustainable and dynamic way. As far as the future of these banks is concerned, we believe that in the long run they will be offered to the market either to strategic investors or through placing shares for Vnesheconombank to cover its expenses on reorganizing the banks and securing their sustainable financial development.
As far as the Russian Development Bank is concerned, it remains to be a key financial instrument for making government money available to small and medium-sized enterprises.
Russia’s export-import bank is the agent for the government in providing guarantee support for industrial exports. In this respect, we are also considering prospects for establishing a state-run export credits insurance agency. In any case, basic strategic plans relating to each of these banks will be submitted for consideration by Vnesheconombank’s Supervisory Board by the end of this year.
The second issue was associated with the fact that Vnesheconombank both in its capacity as a development institution and as an instrument for taking crisis management measures became an owner of both bad and solid industrial assets and shares and for the most part, it’s not typical for a bank of development to manage them. So, our idea is that VEB should set up a sort of specialized investment institution to which VEB could transfer these assets for management or into ownership for them to be capitalized, professionally managed or sold on the market in order to reorganize commercial banks on a break-even basis and make it possible for Vnesheconombank to generate acceptable incomes. This proposal was also backed. Our Supervisory Board made a decision on considering in the short term, till this year-end, specific measures for transferring these assets to this company with its organizational-staff structure with a view to considering this company’s potential for managing other assets which the state would deem it wise to transfer to it. And we’d like to stress that personnel formation is no less important than the creation of this institution. Therefore, we have stringent criteria for selecting managerial staff in terms of their professional competence and impeccable reputation placing great emphasis on statesmanlike approach to their work.
We also discussed a number of issues relating to refinancing Russian companies’ foreign debts. By the way, all the companies that were supported by Vnesheconombank with the Central Bank’s funds got their credits rolled over. A decision to roll over the credits was taken by Vnesheconombank’s Supervisory Board at the beginning of this June. And the main terms of the rollover are in line the Supervisory Board’s decisions, that is, they are market-oriented. So, the risk assessment of these companies in the current situation is in line with the market assessment and with the assessment of their risks by international creditors. In making our proposals we worked on the assumption that a number of Russian companies are at a final stage of their negotiations with the clubs of foreign creditors and there is no doubt that the Russian Government’s decision to roll over Russian companies’ debts would to a great extent influence Western creditors’ stance on restructuring these debts.
As far as Vnesheconombank’s core activities as a development institution are concerned we discussed the project aimed at building a large-scale shipbuilding production facility, the Primorsk shipyard, in Primorsk, not far from Vyborg. Now a decision has been taken to finance the project design work, the pre-project design work was financed by the project’s initiator. We agreed today that in order to secure this project’s success the government should make appropriate moves in parallel with efforts made by Vnesheconombank and its Supervisory Board. Here I mean the Investment Fund’s resources, certain aspects of customs tariff policy and a number of other key tasks. We are sure that the project has a good chance of success because Gazprom and Sovkomflot will place orders with this shipbuilding production facility. These orders include ships to be constructed under the program of developing the Russian shipbuilding industry, that is, ice class ships, liquefied gas ships, oil platforms, and ships with deadweight of more than a hundred thousand tons. Thus, within a week very important decisions were made on constructing new shipbuilding production facilities such as a new Far Eastern shipbuilding production facility on the basis of Zvezda plant as well as a production facility in the North-West of our country in the city of Primorsk.
We also discussed an issue of structuring a transaction in a project in the Olympic construction, this is a media-centre. We participate in this project together with the Krasnodar Territory Administration. Now we have determined participation amounts – Vnesheconombank accounts for 90 percent of investments and the Krasnodar Territory Administration – for 10 percent and the Administration is ready to consider an issue of extending the Territory’s guarantee for the project. The project’s budgeted value is not known yet because we plan to start financing project engineering work. In summary, I’d like to say that today we have done an excellent job in taking quite serious decisions that are crucial for many Russian companies and Vnesheconombank’s core activities. Thank you.
HOST: And now questions, please.
-Good afternoon, Vladimir Alexandrovich, Maxim Tovkailo, the newspaper Vedomosti. Information agencies have just reported that Gazpromneft was refused to get its credit rolled over. All other companies were allowed to get their credits rolled over, here I mean Sitronics, Altimo, EVRAZ, RUSAL, PIK. Can you confirm if this is so or not?
Vladimir DMITRIEV: I don’t have this sort of information. I can confirm that Gazpromneft got its credit rolled over.
-Is that really true?
Vladimir DMITRIEV: Yes, it is. And I can also confirm the fact that the terms and conditions as well as the terms and conditions of original agreements differ because in assessing risks Vnesheconombank takes into account objective market assessments with regard to a specific borrower. But I confirm that all the borrowers that requested us to get their credits rolled over received a go-ahead.
Did I get you right that additional terms and conditions are not related to interest rates alone, did you impose any additional terms and conditions?
Vladimir DMITRIEV: I haven’t said anything about it.
-Are there any additional terms and conditions for some companies besides increased interest rates?
Vladimir DMITRIEV: We haven’t changed basic parameters which were agreed upon and specified in the last year’s agreements.
-And now my final question. Not all companies that obtained your credits for refinancing their debts submitted applications for getting their credits rolled over. VEB has never made public the total number of companies that received the Bank’s credits for refinancing their debts. Can you tell us now how many companies received your credits?
Vladimir DMITRIEV: To my mind, this information is in the public domain. Except for Rosneft that repaid the credit all other companies are included in the said list. If you know something different, please let me know.
-Thank you very much
-Maria Knayzeva, RIA Novosti, good afternoon. May I ask three questions? Can you name companies for which interest rates on rolled over credits were raised and to what extent?
Vladimir DMITRIEV: No, I can’t
-The second question deals with VEB’s capital. Can you tell us what assets, both bank and non-bank ones, VEB is ready to transfer to a newly-established company.
Vladimir DMIOTRIEV: You know that under the Supervisory Board’s decision a new company, VEB-INVEST, was established. Bad assets bought out from GLOBEX-BANK were transferred to this company. In terms of reorganizing banks, above all, such as Svyaz-Bank, VEB has a number of assets that should be isolated and transferred to a professional team. There are also assets that VEB acquired in the course of taking crisis management measures with a view to selling them later or transferring them for professional management or returning them at a certain profit for Vnesheconombank. In order to manage assets efficiently you need a team of professional managers, a team of professional invest-bankers. In this sense, we do not intend to divert Vnesheconombank’s efforts and resources, instead, we are setting up a new company that should operate on the basis of self-recoupment and be responsible for bringing assets to a marketable state. For example, Amurmetall. We believe that this asset should be managed by professionals and VEB’s employees should focus on Vnesheconombank’s core activities. Here I mean assets as those of Kraslesinvest which is responsible not only for implementing a major project aimed at building the Boguchan hydropower station (to my mind our stake there is about twenty five percent) but also the projects to build a pulp and paper mill and a large-scale timber-industrial complex. We’ve got this sort of assets. Moreover, we have also shares on our balance sheet owned by such companies as Rostelecom and EADS and a number other assets, which in our opinion can be managed by a specialized investment company. Having made a decision to establish such a company Vnesheconombank’s Supervisory Board expects concrete proposals for transferring assets to balance sheet or for management to be submitted to the Supervisory Board later.
-I wonder if Svyaz-Bank and GLOBEX will be transferred to this company or not. Have you got such plans?
Vladimir DMITRIEV: No, we haven’t got such plans. I’d like to stress it once more that the two banks have entered a stage of sustainable and financially sound development, their customer base and loan portfolio are on the rise. They are operating on a break-even basis increasing their profits dynamically. They are independent institutions and are almost hundred percent Vnesheconombank’s subsidiary banks.
-And now my last question. You’ve just said that VEB will finance the construction of a shipyard. How much money is VEB going to invest?
Vladimir DMITRIEV: The total amount of funds is about 38 billion rubles. The project is expected to be financed by Vnesheconombank, the Investment Fund and the project’s initiators. The project’s initiators are ready to invest twenty percent of this amount.
-And the remaining eighty percent will be invested by the Investment Fund and VEB?
Vladimir DMITRKIEV: Yes, that’s right.
-And what’s VEB’s participation amount?
Vladimir DMITRIEV: It’s about 60 percent.
-Newspaper Gazeta, Andrei Birykov. Vladimir Alexandrovich, have you discussed an issue of AvtoVAZ? Is VEB going to provide financial assistance to AvtoVAZ? And if it is, what’s the amount of this assistance?
Vladimir DMITRIEV: We haven’t discussed an issue of AvtoVAZ today. But VEB is the creditor of AvtoVAZ and at the same time our subsidiary banks just a year ago were among the first ones that provided emergency support to AvtoVAZ. Here I mean GLOBEX and NTB.
-Are you discussing a issue concerning VEB’s possible purchase of bonds worth 40 billion rubles?
Vladimir DMITRIEV: Yes, we are.
-Another question. Today the Prime Minister made public a figure of 11 billion rubles. This is the total amount of credits that were extended. He also said that borrowers were repaying these credits properly. Can you tell us how much money out of the said 11 billion rubles has been returned to VEB?
Vladimir DMITRIEV: Whereas the credits were extended a year ago and they were serviced properly the most part of credits.
-The most part – is this more than a half?
Vladimir DMITRIEV: I can’t give this figure now.
Vladimir DMITRIEV: It’s not a matter of repayment; it’s a matter of servicing. Credits are repaid at the end of credit period. And they are being serviced properly. If they had been repaid it would make no sense to talk about rolling them over.
HOST: Any more questions? Thank you very much.
Vladimir DMITRIEV: Thank you.