On Refinancing Russian Companies’ Obligations to Foreign Financial Institutions
Vnesheconombank’s Supervisory Board considered issues of refinancing Russian companies’ obligations to foreign financial institutions with an aim of implementing Federal Law dated 13.10.2008 N 173-FZ “On Additional Measures for Supporting the Financial System of the Russian Federation”.
The Supervisory Board approved Vnesheconombank’s participation in refinancing a number of transactions of companies operating in the metal mining industry and microelectronics, the operation of which is of great socio-economic importance to the Russian Federation, with these transactions being worth about 2 billion US dollars.
Thus, the total amount of transactions approved by the Supervisory Board in refinancing real- sector companies’ foreign obligations is about 10 billion US dollars.
Vnesheconombank Starts to Refinance Russian Companies’ Debt Obligations to Foreign Financial Institutions
Under Federal Law dated October 13, 2008 N 173-FZ “On Additional Measures for Supporting the Financial System of the Russian Federation” and pursuant to decisions taken by the Supervisory Board, Vnesheconombank started to refinance Russian companies’ debt obligations to foreign financial institutions. Funds in the total amount of 7.8 billion US dollars have been allocated to a number of companies in the fuel and energy complex, smelting industry, construction sector, transport and communications industries.
Origin: Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
On Changes in Russian Development Bank Supervisory Board
State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ made a decision to early terminate powers of members of the Russian Development Bank Supervisory Board.
By the same decision, Vnesheconombank elected a new Supervisory Board of the Russian Development Bank. The Supervisory Board is comprised of: Management Board Member, Vnesheconombank Deputy Chairman S.P. Lykov, Management Board Member Vnesheconombank Deputy Chairman A.P. Zabaznov, Vnesheconombank’s Financial Institutions Department Director A.V. Zelenov, Russian Development Bank Management Board Chairman S.P Krjukov as well as President of the Russian Non-Governmental Organization of Small and Medium Business OPORA ROSSII S.R. Borisov
OJSC The Russian Development Bank was founded in 1999. State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ owns 100 percent of the Russian Development Bank’s shares.
On Approving Transaction to Acquire 99% of CJSC Commercial Bank Globex’s Shares
In order to further stabilize Russia’s banking sector, Vnesheconombank’s Supervisory Board approved the transaction to acquire 99% of CJSC Commercial Bank Globex’s shares.
As agreed with the Government of the Russian Federation, the Central Bank of Russia is to allocate 2 billion US dollars in the form of deposit for a period of one year to Vnesheconombank to support Bank Globex.
Vnesheconombank took prompt and necessary actions to get Bank Globex operating without fail again. Globex’s priority obligations have been fulfilled in full. The developed plan to rescue the Bank will make it possible in the near future to restore its position as one of major reliable financial institutions.
About 80 thousand customers and depositors of Globex will be absolutely guaranteed that the Bank will continue to fulfill all its obligations to them.
In the most immediate future, Bank Globex’s management will be strengthened with highly qualified managers. In particular, the Central Bank of Russia is considering Vitaly Vavilin’s candidacy. He was recommended by Vnesheconombank for the post of Globex President. Vitaly Vavilin was for a long time head of the National Trade Bank (Tolyatti) and Vnesheconombank is this Bank’s shareholder.
Origin: Press Office of Vnesheconombank
Phone: +7 (495) 608- 46-93, Fax: +7 (499) 975-21-34
Vnesheconombank Supervisory Board Approves the Procedure for Implementing Measures provided for by Articles 4 and 6 of the Federal Law “On Additional Measures for Supporting the Financial System of the Russian Federation”
Vnesheconombank Supervisory Board resolved to appoint Anatoly Vladimirovich Tikhonov as Management Board Member – Vnesheconombank First Deputy Chairman. Earlier A.V. Tikhonov was Deputy Governor – Deputy Chairman of the Krasnodar Territory Government.
An Extraordinary Meeting of Vnesheconombank Supervisory Board Held
V.V. Putin, the Russian Federation Prime Minister, chaired the meeting of the Supervisory Board of the Bank for Development – Vnesheconombank
In the past few days, as you are well aware – and we have already discussed it at the Presidium meeting today – the Government has taken a series of important measures designed to protect the national economy against the negative impacts of the global financial meltdown.
In my judgment, securing sustainability and resilience of the Russian banking system, ensuring a stable and continuous operation of Russian enterprises is a key objective. In addressing the task, the Bank for Development – Vnesheconombank (VEB) has an important role to play.
By the year-end, Vnesheconombank’s charter capital will be increased by RUB 75 billion. These funds could be used for the purchase of the Russian securities and insurance of transactions on the domestic financial market.
Another RUB 175 billion worth of funds from the National Wealth Fund will be transferred for management to VEB to maintain the stability of the Russian stock market, including the purchase of the Russian companies’ corporate bonds. Actually, I mentioned it just a couple of days ago.
Furthermore, the financial bailout package provides for allocation of RUB 950 billion as subordinated funding to Russian banks. It is going to be the so-called ‘long money’ extended for a 10-year term. These funds are intended for recapitalization of the Russian banks and, at the same time, should help resolve the liquidity crunch.
Thus, the Central Bank of the Russian Federation (CBR) will advance RUB 500 billion to the Russian Savings Bank (Sberbank) and RUB 450 billion to Vnesheconombank, which, in its turn, will distribute the subordinated funding as follows: VTB – RUB 200 billion, Rosselkhozbank – RUB 25 billion, other commercial banks – RUB 225 billion. However, the shareholders of such commercial banks should be prepared to use their own equity to recapitalize the banks.
More importantly, these banks must be sound and solid, have a high potential and high credit ratings.
Along with the stimulus package for the banking sector, we should obviously support the real sector of the Russian economy. Today, we have already discussed it in detail. Primarily, the real economy sector should be ensured access to financial resources.
Lots of Russian enterprises have been raising foreign credits. Regrettably, at present, this mechanism is not working any longer. Meanwhile, debts are coming due.
Obviously, we should come up with alternative solutions and seek to refinance our companies’ foreign borrowings drawing, first and foremost, on internal sources of refinancing. That could help to stave off the threat of selling off the Russian enterprises’ assets at knockdown prices that have nothing to do with the fair value of businesses.
To this end, the Central Bank is allocating USD 50 billion to Vnesheconombank, with the right to obtain refinancing of foreign credits to be granted primarily to companies that raised them prior to 25 September 2008, i.e. before the aid package was announced.
Today, we are going to approve the procedure and conditions VEB will have to apply when refinancing Russian enterprises. This decision is critically important. It would help to immediately address the needs of the Russian borrowers.
I am fairly confident the eligibility criteria for obtaining subordinated loans would be as follows:
First, a Russian company’s core business is to be focused on the real economy sector on the territory of the Russian Federation;
Second, its activities should be viewed as important either for the region’s economy or strategic industries. Equally important, we could not possibly afford ‘to lose’ assets, if it leads to negative social impacts;.
Third, we must refinance only those credits that were raised to deliver investment projects or acquire assets in Russia, in the Russian economy, I am emphasizing.
Finally, the bailout package is intended for those companies that will attract co-financing on their own, thus sharing risks with the state.
All these steps are specified in the amendments to the Federal Budget and in Federal Law ‘On Additional Measures for Supporting the Financial System of the Russian Federation’. The State Duma and the Council of Federation have already approved the Law. The amendments to the Budget are subject for discussion this week. I hope that the Russian Government and members of the Parliament will manage to arrive at the right decisions and agree their positions. There is no time to be lost.
By the moment the above acts become effective, Vnesheconombank should take all organizational decisions. The Bank should be gearing up to effect the required financial operations. That is why we promptly convened an extraordinary meeting of the Supervisory Board of the Bank for Development today.
Now, let us proceed with the agenda.
Origin: Internet-portal of the Government of the Russian Federation
Vnesheconombank Supervisory Board approves the Procedure for implementing measures provided for by clauses 1 and 2 of the Federal Law “On Additional Measures for Supporting the Financial System of the Russian Federation”
Vnesheconombank (VEB) Supervisory Board approved criteria and the procedure for selecting companies to refinance their debts to foreign creditors. VEB Chairman Vladimir Dmitriev spoke about it after an extraordinary meeting of Vnesheconombank Supervisory Board. It is only companies operating on the Russian territory and in the real sector of the economy, he explained, that would be able to obtain funds for refinancing from Vnesheconombank. Their activity should be viewed as critically important for the Russian regions’ economy or strategic industries.
Companies that raised credits to implement investment projects or purchase assets on the Russian territory are entitled to request funds for refinancing foreign loans. Besides, in case of joint stock companies, they should raise co-financing all on their own, thereby sharing risks with the state, said V. Dmitriev.
A maximum amount of funds to be provided by Vnesheconombank (VEB) to Russian companies for refinancing foreign loans shall not exceed USD 2.5 billion per a single borrower. Vladimir Dmitriev also said that a minimum amount is fixed at a level of USD 100 million adding that such conditions are set forth in the Memorandum on the Bank’s Financial Policies, which stipulates that, a loan to be granted is not to exceed 25% of VEB’s charter capital.
VEB is to consider applications for refinancing foreign loans within a period of 18 days from the date of submission. V. Dmitriev explained that it would take 3 days to conduct a preliminary examination of an application, 10 days to conduct a comprehensive examination during which the Bank is to assess a borrower’s financial standing and review documents relating to an applicants’ foreign loan. A final decision on the outcomes of examination is to be made within 5 days, said V. Dmitriev. A great number of applications made it necessary to optimize the Bank’s organizational and personnel structure to process applications more efficiently.
Origin: http://rbc.ru/" target=_blank>RBC.RU
Procedure for Implementing by State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Measures Provided for by Articles 1 and 2 of Federal Law No. 173-FZ ‘On Additional Measures for Supporting the Financial System of the Russian Federation’ dated 13 October 2008
On Decisions Made by Vnesheconombank’s Supervisory Board
A meeting of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board chaired by Russian Prime Minister Vladimir Putin was held at the Russian Federation Government House today, on September 15.
http://www.government.ru/content/governmentactivity/mainnews/archive/2008/09/15/3262446.htm" target=_blank>V.V.Putin’s address at the meeting…
The meeting approved the Bank’s participation in financing the following major investment projects:
The Sevmash Production Association’s production program;
OJSC Corporation VSMPO-AVISMA investment development program. The Corporation’s investment program is aimed at reconstructing and modernizing the facility and provides for increased production of deeply processed products. The implementation of this investment program will result in increased production of titanium sponge, it will increase by 20% (up to 44 thousand tons per year), and rolled titanium – by 46% (up to 46 thousand tons per year). The program’s total value is 26 billion rubles, the Bank’s participation share in the project will amount to 400 million US dollars. Funds are to be made available for a period of 5 years;
Construction and operation of the alpine ski resort “Rosa Khutor” in Krasnaya Polyana. The Rosa Khutor project provides for creating a unique year-round sports and tourist complex. Under the project a number of Olympic sports facilities are planned to be built, they include an alpine ski center, a snowboard park, alpine ski routes to hold competitions in all 10 alpine ski events as well as hotel infrastructural assets. The project’s total value is 1,375 million US dollars. Vnesheconombank plans to earmark funds worth up to 750 million US dollars for a period of 15 years for this project’s implementation;
Construction of a new integrated complex to manufacture ammonia, methanol and granulated carbamide in the city of Mendeleevsk, the Republic of Tatarstan implemented by OJSC “Ammonii”. The project provides for building an integrated facility to manufacture ammonia and methanol with a capacity of 2,050 tons of ammonia per day and 668 tons of methanol per day at the mineral fertilizers manufacturing factory Mendeleevskazot LLC. The total value of the project is more than1billion US dollars US dollars. Vnesheconombank’s participation share will amount up to 870 million US dollars;
Construction of a factory in the Ulyanovsk region to manufacture and assemble super- light jets Eclipse 500 as well as provide after-sales services. The factory’s projected capacity will amount to 800 jets per year. Vnesheconombank is expected to finance the project in full the total value of which is 205 million US dollars, moreover Vnesheconombank and the Ulyanovsk region Administration will be among the shareholders of the enterprise.
The Supervisory Board has also made a decision to establish a targeted financing limit for the Kazakhstan Development Bank to open a credit line worth up to 300 million US dollars with a repayment period of 15 years. The credit line is of targeted nature – funds will be made available to support the export of Russian companies’ industrial products and services to the Republic of Kazakhstan. Decisions on conducting each specific transaction are to be made by Vnesheconombank’s governing bodies including decisions on all substantial terms of these transactions.
A number of other issues have been also considered.
The Supervisory Board of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ held its regular meeting chaired by Russian Prime Minister Vladimir Putin.
The Supervisory Board approved Vnesheconombank’s annual report.
The meeting approved the Bank’s participation in the following major investment projects:
- lending the project to build a section of high-speed motorway “Moscow – Saint Petersburg”;
- lending the project to build a railway carriage production facility in the city of Tikhvin of the Leningrad region.
The Supervisory Board also resolved to open Vnesheconombank’s representative offices on the territory of the Far Eastern, Southern and Siberian Federal Districts.
Changes in State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ Supervisory Board Membership
Order of May 26, 2008 # 747-r
1. The Order terminates the membership of S.E. Naryshkin and V.N. Putilin in the Supervisory Board of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’
2. The Order appoints the following persons as members of Vnesheconombank’s Supervisory Board:
V.A. Zubkov – First Deputy Chairman of the Russian Government
S.B. Ivanov – Deputy Chairman of the Russian Government
3. The Order specifies new posts of the following members of Vnesheconombank’s Supervisory Board:
A.L. Kudrin – Deputy Chairman of the Russian Government, Russian Finance Minister
E.S Nabiullina – Russian Economic Development Minister
V.B. Khristenko – Russian Minister of Industry and Trade
Chairman of the
Origin: http://www.government.ru/content/governmentactivity/rfgovernmentdecisions/archive/2008/05/28/9632685.htm" target=_blank>the Russian Government’s Internet Portal