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The Generous Pays Three Times
The Supervisory Board of Vneshekonombank (VEB) sanctioned yesterday appropriation of funds to Russia’s companies unable to easily refinance credits raised with nonresident banks. Of overall amount of $50 billion, around $10 billion was distributed. According to available data, the list of the companies rescued from margin-call problems sets forth RUSAL, X5 retailer, VimpelCom and RZD. RZD has no money problems, but raised $270 million with VEB to preserve the resource for adjacent industries.
Officials from Vladimir Putin’s press service confirmed yesterday that the VEB Supervisory Board had met to decide on refinancing indebtedness of Russia’s companies. Prime Minister Vladimir Putin heads that Supervisory Board. The amount was a bit less than $10 billion and no names of the rescued companies were officially disclosed.
According to available information, the money went to Alfa Group firms, RUSAL and RZD. VEB neither confirmed nor denied the information. Spokesmen of the bank aren’t talkative when it comes to refinancing foreign loans, for which purpose the Central Bank of Russia has appropriated up to $50 billion to VEB.
The sources say that the root cause of such secrecy is that “all key decisions on distributing the government’s support are made at the very highest level, and the bank just executes them.”
So, the information about companies backed up by VEB is very contradictory. According to some sources, for instance, Mechel is amid the companies that were granted the stabilization loan. But a spokesman of Finance Ministry said yesterday he didn’t remember seeing Mechel in the list.
As to RZD, its anonymous representative confirmed that the company had approached VEB for money to pay off the first tranche of the $350-million loan granted by the western bank syndicate in 2005. VEB agreed to provide 75 percent of required amount, $270 million. “We were able to independently redeem the loan but we would rather preserve resources to finance services of suppliers from adjacent industries,” the source pointed out.
Regardless, the biggest amount apparently went to RUSAL. “Six hours ago, the company notified banks of the syndicate that it had agreed with VEB about the loan of $4.5 billion,” Interfax reported yesterday with reference to a source. RUSAL had raised that loan in spring to acquire a blocking stake in GMK Norilsk Nickel.
www.kommersant.com
All the Article in Russian as of Oct. 30, 2008
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