VEB Received Request for USD 3 bln in Loans
OREANDA-NEWS. February 2, 2009. Russian state-owned bank Vnesheconombank (VEB) has received requests from 60 banks for about 100 billion rubles (USD 3.01 billion) in subordinated loans, VEB chief Vladimir Dmitriev said.
VEB, the main distributor of Moscow's anti-crisis funds, has become one of the country's most powerful corporations because it helps decide which businesses will receive state help.
It is entrusted with distributing 450 billion rubles of subordinated loans to banks and figures about how much state help has been requested give an indication of the scale of the Russia's economic crisis.
"We have received requests from about 60 banks for a total volume of about 100 billion rubles," Dmitriev said on the sidelines of the World Economic Forum in Davos, Switzerland.
"We already have a decision for three banks for a total of 17 billion rubles and the financing must start very soon," he said in an interview late on Thursday.
"The management of the bank will also recommend to the supervisory board that a decision be made for another four banks on a total of 19 billion rubles," he said.
He did not name the banks.
Russian banks are facing a growing pile of bad loans as the economy heads for its first annual contraction in a decade and companies find it difficult to refinance foreign debts.
VEB has also been entrusted by the state with distributing about USD 50 billion to companies to help them restructure their foreign debts.
VEB said Russian companies have made bids for about USD 80 billion in help to restructure foreign debts and that previous estimates of USD 90 billion in bids made were incorrect.
"We have received bids of a little over USD 80 billion for help in refinancing the foreign debts of companies," Dmitriev said. "A decision has been made on refinancing for ... USD 14 billion."
Russian corporates have to pay back USD 115.7 billion in foreign debt and interest this year, according to government estimates.
Some of Russia's richest men who borrowed billions of dollars in the boom years under Prime Minister Vladimir Putin have been badly hit by the economic crisis as the value of collateral they put up as security for major loans plummeted.
Metals tycoon Oleg Deripaska last year used his 25 percent stake in Norilsk Nickel, the world's leading producer of nickel and palladium, as collateral for a USD 4.5 billion loan from VEB to refinance foreign debts.
Refinancing for corporate debts was an extreme measure taken only when few others were available, Dmitriev said.
"These measures were taken in those cases when a failure by a Russian company to fulfill obligations to a foreign creditor could lead to the estrangement of assets which have strategic importance for the country's economy or which could lead to negative social and economic consequences," he said.
When asked what would happen to the stakes used as collateral if debts were not repaid, Dmitriev said decisions would be taken at the level of the supervisory board, headed by Prime Minister Putin.
He also said the state did not want to replace private property with state property.
"Our influence is commensurate with the level of our transparency from the point of view of our core business, so investment activities, and the measures that are taken as part of the anti-crisis measures."
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