Vnesheconombank Chairman Vladimir Dmitriev’s Interview on the Results of Vnesheconombank’s Supervisory Board Meeting
TV Channel VESTI
HOST: Last year, VEB’s loan portfolio exceeded 350 billion rubles. The Bank started to finance 21 projects. Today, the Bank’s Supervisory Board has discussed VEB’s performance for the year 2008. And now VEB Chairman Vladimir Dmitriev is giving a briefing. We are offering you a live broadcast of it.
Vladimir DMITRIEV, Chairman of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’: 70 percent of the Bank’s loan portfolio accounts for credits extended for a period of more than three years, this means that it is a long-term portfolio.
The Supervisory Board meeting also discussed and approved the results of the tender for selecting an auditing firm. Ernst and Young auditing firm was approved as auditor for the year 2009.
VEB’s Supervisory Board members also discussed issues relating to the current status of the Bank’s loan portfolio that was formed in the course of implementing measures for securing financial sustainability and, in particular, measures for refinancing Russian companies’ foreign debts. You know that out of 50 billion dollars only 10.5 billion dollars were used. We are well aware that some companies have problem repaying credit resources extended by Vnesheconombank through using gold and foreign currency reserves in due time and in full. So, today the Supervisory Board has agreed upon general principles and general approaches with regard to the borrowers that find it difficult to repay debts. If necessary, their debts we’ll be rolled over for 1 year provided that they unconditionally fulfill the obligations they assumed under original credits and in line with the original debt repayment and servicing format.
Today, Vnesheconombank’s Supervisory Board has made a decision on making Vnesheconombank’s transactions with financial resources of the National Wealth Fund on the stock market more flexible. This issue is also being addressed in terms of purchasing a part of Rostelecom’s shares using the National Wealth Fund’s financial resources. Vnesheconombank is to buy these shares out from KIT Finance.
Today, we also discussed another investment project that had already been dealt with by our Management Board in somewhat different configuration. Here, I’m talking about setting up production of modern engines YAM3-530 meeting Eurostandard 4 and 5 at the Yaroslavl engine factory. As a result of consultations at the Government Office and line ministries, the original format of the project was optimized. And now Vnesheconombank’s participation share in the project was reduced from a bit more than 10 billion to 6 billion rubles. The project itself underwent some changes brought about by its optimization. We hope that in its current configuration it will become highly instrumental in upgrading diesel engines and creating a range of engines that are in much demand by a number of automotive industry companies in our country and abroad.
We have discussed issues of financing Olympic facilities that required approval by the Bank’s Supervisory Board but these issues are of technical nature. In any case, we reported to the Supervisory Board on our current work with borrowers implementing investment projects in the city of Sochi in the course of preparations for the Sochi Olympics. We started to finance the project ‘The Sochi Cargo Port” and in the most immediate future we’ll start financing the construction of the Sochi Airport. This is a short summary of our Supervisory Board’s agenda and decisions that were taken.
Agency PRIME-TASS, Elena Malysheva: Couldn’t you tell us if you have discussed an issue of Rusal’s debt restructuring. Rusal is known to have offered VEB to issue bonds to cover its debt. Have you taken any decisions on this issue?
Vladimir DMITRIEV: Today we have made a decision of universal nature; it deals with the borrowers that have problem repaying their debts. As I have already said we agreed on terms and conditions allowing to roll over credits for a period of one year. But our approach is quite strict. The Russian Prime Minister voiced it once at his meeting with Duma deputies and it became a sort of guideline. The approach is that in the case that the borrower is not in a position to fulfill its obligations, pledged property is to be recovered. We have not discussed issues with regard to individual borrowers but addressed the current situation and the problems some borrowers are confronted with and we approved a single, universal approach to potential defaulters.
RIA Novosti: Could you tell us about how much money from the National Wealth Fund is planned to be used for purchasing Rostelecom’s shares. And on what terms? Thank you.
Vladimir DMITRIEV: In the first place, we are going to use money of the National Wealth Fund held now by Vnesheconombank. Here we are talking about a stake whose amount is less than the one being purchased by the Deposit Insurance Agency. And we insist that this stake amounting to about 40 percent of all shares should be managed by Vnesheconombank taking into an account an objective of consolidating the state’s assets in the telecommunications sector and here I mean Svyazinvest and Telecom.
Interfax: Are you going to sell any shares or bonds purchased for the money of the National Wealth Fund or are you going to use available resources of the National Wealth Fund?
Vladimir DMITRIEV: The balance of available funds is not sufficient to participate in buying out the stake offered to us from KIT Finance. So, we’ll have to sell certain assets purchased on the stock market in order to use proceeds to prevent KIT Finance from going bankrupt.
-Which stake are you going to purchase?
Vladimir DMITRIEV: In total, I’m talking about KIT Finance’s 40 percent stake. The purchase price is at the lower end of the range and amounts to 230 rubles per share. In total, we are purchasing a little more than 10 percent.
-You mean VEB?
Vladimir DMITRIEV: Yes, I do.
-And is the Deposit Insurance Agency going to purchase remaining shares?
Vladimir DFMITRIEV: Yes, it is.
Is the Deposit Insurance Agency going to purchase shares for its own money?
Vladimir DMITRIE: Yes, it is
At a regular meeting of Vnesheconombank’s Supervisory Board a decision was taken to add the procedure for Vnesheconombank’s implementation of measures provided for by clauses 4 and 6 of Federal Law dated October 13, 2008 № 173-FZ “On Additional Measures for Supporting the Financial System of the Russian Federation” with a requirement for a minimum amount of equity of no less than 3.5 billion rubles for banks to be able to obtain subordinated loans.
Moreover, requirements to borrower banks for lending to the real economy were made more stringent, now they are to secure for a period of one year from the date of obtaining a subordinated loan availability of credits in their loan portfolio to be extended to high-priority economic sectors in line with recommendations of the Russian Economic Development Ministry, with repayment periods of no less than one year at an effective rate not exceeding the Bank of Russia’s refinancing rate increased by three percentage points in the amount no less than the sum of obtained subordinated loan and they are also to maintain the volume of such credits until they repay a subordinated loan.
Vnesheconombank’s Management Board was ordered to hold talks with borrowers over their agreement with the said terms of obtaining subordinated loans.
Vnesheconombank’s Supervisory Board made a decision to extend subordinated loans to the following Russian lending institutions: CJSC JSCB NOVIKOMBANK in the amount of 478 719 000-00 rubles, OJSC JSCB ROSEVROBANK in the amount of 980 000 000-00 rubles, OJSC TransKreditBank in the amount of 2 930 000 000-00 rubles, OJSC Bank Saint-Petersburg in the amount of 1 466 000 000-00 rubles JSCB Transkapitalbank (CJSC) in the amount of 729 998 500-00 rubles, OJSC Pervobank in the amount of 725 000 000-00, OJSC SKB-bank in the amount of 810 000 000-00 rubles, OJSC Promsvyazbank in the amount of 4.000.000.000-00, OJSC Bank ZENIT in the amount of 2 140 000 000-00 rubles, CJSC Bank Russky Standard in the amount of 4 958 783 400-00.
The Supervisory Board also approved a decision on extending by Vnesheconombank a credit line with a limit of up to 10 billion rubles for a period of up to 15 years to the winner of the tender held by the Administration of Saint-Petersburg for the right to conclude an agreement on building, reconstructing and operating facilities incorporated in the assets of the Pulkovo airport on the basis of public private partnership.
The Supervisory Board also approved Vnesheconombank’s participation in financing the project to build a propylene manufacturing complex with a capacity of 500 thousand tons a year at Tobolsk-Polymer (LLC) (the Tyumen region) by way of opening credit lines for Tobolsk Polymer (LLC) for a period of up to 13.5 years.
Origin: Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
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