Vnesheconombank’s Regular Supervisory Board Meeting Held

25 september 2014 года
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D.Medvedev: “We have to adapt to new challenges and look for sources of development and this remains to be one of the Bank’s priorities”.

Dmitry Medvedev’s opening address:

We have already met recently with some of those present today at a meeting devoted to prospects for Vnesheconombank’s development and of course to the current situation. The Government made a decision to support the Bank for Development by additionally capitalizing it with funds from the budget for the Bank to maintain the amount of its participation in developing the national economy and moreover to secure a required volume of funding and liquidity with the support of the Finance Ministry and the Central Bank in the total amount of up to 240 billion rubles as well as implement a major program of state guarantees. I am talking about it on purpose because according to some, the state refused to commit funds to the Bank. This is not the case – on the contrary, a decision was made to additionally capitalize the Bank in order to ensure its sustainability as a development institution.

D.Medvedev: “The Government made a decision to support the Bank for Development by additionally capitalizing it with funds from the budget for the Bank to maintain the amount of its participation in developing the national economy and moreover to secure a required volume of funding and liquidity with the support of the Finance Ministry and the Central Bank in the total amount of up to 240 billion rubles as well as implement a major program of state guarantees”.

Nevertheless, foreign economic conditions are changingand that is why we need to adapt to new challenges, look for sources of development and this remains to be one of the Bank’s priorities. Based on these considerations, we’ll discuss the creation of a fund to support the development of mono-cities. This is a very difficult task but we must make efforts even in the current difficult situation to address mono-cities’ problems. Our task is to ensure the development of economy and social sectors there and to this end, such a fund is being established. It will fund transport and housing and utilities infrastructure and will be instrumental in launching investment projects.

Another line of activity is providing support for ourdomestic aviation industry. Today we’lldiscuss the possibility to fund purchases of SukhoiSuperjet 100 by a number of our airlines. The fact that our airline companies purchase domestic aircraft shows prospects for enhancing our aviation industry, the more so, until recently our air carriers have preferred to buy foreign made aircraft and the reason for it was the number of airliners on the market and price/quality ratio. So, transactions that we are discussing today are very important for the development of our economy. It’s not that sanctions have been imposed against a whole number of our companies and economic sectors. We should simply rely on our advanced technologies, resources, high-technology industries and that is why these purchases (here I mean 16 aircraft) should make their contribution to the development of the Russian aviation industry. There is a number of other issueswe’ll discuss in the course of VEB’s Supervisory Board meeting.

Origin: Internet-Site of the Government of the Russian Federation

 

After Vnesheconombank’s Supervisory Board Meeting VEB Chairman Vladimir Dmitriev answeredjournalists’ questions

V.Dmitriev: Good afternoon dear colleagues!

A regular meeting of VEB’s Supervisory Board was held today. It was above all devoted to funding certain transactions. We also made decisions on a number of Vnesheconombank’s key lines of business related to its subsidiary companies’ activities, here I mean the creation of a fund to support mono-cities, approval of its charter and appointment of its director general. As far as major projects were concerned, we discussed an issue of supporting our aviation industry in so far as it relates to supplyingSukhoiSuperjet aircraft to the Russian market for Russian airlines as well as to promoting our aviation industry products such SukhoiSuperjet aircraft to foreign markets.

As to domestic supplies, we agreed upon extending two credits to our subsidiary – VEB-Leasing to fund the supplies of 16 SukhoiSuperjet aircraft for Russian air carriers including Aeroflot, which accounts for the most part of these supplies. As to the export of Russian aircraft, we made a decision to increase a limit of a credit line to be opened for promoting them to foreign importers to 2.5 billion dollars. The reason for it is that the previous decision taken by our Supervisory Board on supplying 11 aircraft became invalid in late 2013. Now the SukhoiSuperjet Company has about 80 aircraft in its backlog of orders and the geography is pretty wide, it includes above all Mexico where our planes are already flying successfully as well as Indonesia and Laos.I’d like to stress that upon supplying these aircraftwe employ a mechanism for comprehensive support for Russian non-raw materials exports. This mechanism includes subsidizing interest rates with funds from the budget making it possible for our products and financial terms to be competitive with similar offers of other countries and suppliers. In order to promote our aircraft to foreign markets we engage not only Vnesheconombank but also the Export Insurance Agency of Russia (EXIAR) and our subsidiary – VEDB-Leasing.

Today we have made decisions to fund AvtoVAZ and United Auto Group, whichis linked to the Izhevsk Automobile Plant. The funds are to be used to modernize AvtoVAZ production facilities and create a new generation of engines to be supplied to AvtoVAZ.I’d like also to mention new AvtoVAZ Renault-Nissan models. The credit facilities worth about 30 billion rubles are to be used to fund all these three projects. These projects are included in the total limit with regard to which a decision was made in 2012 that Vnesheconombank would provide funds in the amount of up to 60 billion rubles to finance AvtoVAZ’s investment program.

As I have already said, we have made a decision today to establish a fund to support mono-cities. We have agreed upon the Fund’s Charter with the key ministries and VEB’s Supervisory Board approved it. We also agreed upon a candidature of the Fund’s director general. Relying on financial resources to be committed from the budget this year and in the next two years the Fund will be responsible for funding - on the basis of co- financing with local and regional authorities – engineering and other infrastructure projects as well as other projects to be implemented in mono-cities.

The Fund’s another substantial line of activity (in terms of human factor) is to train specialists - both representatives of regional and municipal authorities responsible for developing mono-cities and representatives of business who are ready to implement various projects in mono-cities.

Today we have agreed upon a candidature of the Far East and Baikal Region Development Fund’s Director General. We hope the Fund’s new director general who is despite his young age quite experienced and competent in investment activity as he worked for major investment companies, banks and in our subsidiary institution – the Russian Direct Investment Fund will ensure the Fund’s operation along its key lines of activity. Under the Finance Ministry’s order 15 billion rubles were transferred to the Fund’s capital. We have also discussed a number of other issues of less importance.

Question: Who will be in charge of the Fund in the Far East?

V.Dmitriev: Alexei Chikunkov will be in charge of the Fund in the Far East.

Question: Maxim Tovkailo, Vedomosti newspaper. To tell you the truth I have a lot of questions but could start with 240 billion rubles mentioned by the Prime Minister in his opening address. What sort of sum is this? Is this new money or the deposit that was converted into you capital?

V.Dmitriev: The only thing that I can comment on is the figure. This figure is related to projects that we undertook to fund. Here I mean credit agreements, which we must comply with unconditionally. But you know quite well that there is no open market as such, foreign borrowings are closed both in terms of interbank credits and in terms of placing bonds. Nevertheless, we count on the domestic market because we do not intend to refinance our debts on domestic loans and creditsthrough using government sources and they amount to no less than 107 billion rubles, which we are to pay next year. And here we are telling the Government that we count on the domestic market to refinance these funds.

But as far as projects are concerned, it’s a different story, given the current economic situation and funding sources. The Prime Minister and the Chairman of our Supervisory Boardmeant various forms of state support through using funds at the disposal of the Government by way of using funds that the Central Bankis ready to pump into the economy through banks. Now different options of expanding functional capabilities of measures that are already being taken are under consideration. I’m talking about increasing limits upon issuing banks’ resources under their mutual sureties. Now it’s 50% of capital, we are considering increasing this indicator with the Central Bank. Here I mean refinancing of banks through using financial resources of the Central Bank and above all banks affected by sanctions to fund investment projects based on project finance principles where a part of risk is covered by state guarantees and a substantial amount of financial resources is provided by the Central Bank. As far as Vnesheconombank is concerned other forms of support are also being considered including those we used in the period of crisis when we absorbed excessive liquidity from the system by issuing as you remember foreign –currency-denominated bonds. These were bonds with a duration of one year. Nevertheless, the Central Bank and commercial banks bought them. The state is ready to resort to this well-known range of measures.

We do not pretend to be a unique bank as we are aware that other banks with state participation affected by sanctions count on similar forms of state support. At the same time, I rule out any measures applicable only to Vnesheconombank because we do not see any reasons to encroach on anybody’s interests in this unhealthy global situation.

As far as the Bank’s capital is concerned, a decision was made that the Bank’s capital would be maintained and replenished on a sustainable and permanent basis to the extent the Bank needs to meet key financial sustainability standards and above all capital adequacy ratio at a level of no less than 10% because it is this key covenant that is specified in our issue prospectuses (here I mean our bond issues on foreign markets) and in agreements with Russian and foreign creditors.

As a first step, our capital is to be replenished by 30 billion rubles.

Question: This sum is to be committed only in 2015 or the same sum will be committed in the future?

V.Dmitriev: I’d like to stress it once more that a decision was made to support the Bank on a sustainable basis, I mean not for a period of one yearand to the extent needed to maintain the Bank’s financial sustainability. For example, if we need 15 billion rubles in 2016, 15 billion rubles will be committed. If we find it necessary to increase this sum, we’ll apply to our Supervisory Board and the Government.

Question: Until which year is the sum of 240 billion rubles to be committed?

V.Dmitriev: This is the sum of our obligations we are to fulfil next year, in 2015.

Question: Given thatVEB needs funds, does VEB plan to sell its stake for example in Gazprom and its other assets: Svyaz-Bank, Globexbank?

V.Dmitriev: In this respect, a decision was also taken. It provides for the Bank to submit its considerations and a strategyfor withdrawing from these assets until 2020.Naturally, nobody wants the Bank to sell the assets and put losses on its balance sheet. It is out of the question be- cause as of today these assets’ balance sheet value is significantly higher than their market value. You’ve mentioned Svyaz-Bank and Globexbank. We should keep it in mind that in order to rehabilitate the banks we took a deposit in the amount 230 billion rubles from the Central Bank and have already paid the Central Bank an interest of 40 billion rubles for using the deposit. So, to sell Svyaz-Bank andGlobex at the price of their capital… I think that now the market is even worse and nobody is likely to purchase these financing institutions in the current situation although they are financially stable dynamically developing banks. So, our understanding is that non-core assets should be sold at market prices in such a condition that would allow the Bank to pursue its policy on a break-even basis.

Question: Vladimir Alexandrovich, are you still planning to participate in project financing of the Yamal LNG Project? If you are, where are going to get significant money from?

V.Dmitriev: I would address this question toNovatek but I can also say that our Bank is not the only one that is going to participate in this project. We know that Novatek’s Chinese partners show great interest and readiness to participate in this project on a large scale. We know that European companies are still involved in this project despite sanctions. Several Russian banks including Vnesheconombank are also interested in participating in the project. The state showed its interest in the project by taking a decision to commit financial resources for this project from the National Wealth Fund. And this gives additional guarantees for reducing risks. I am not going to tell you about the amount of our participation share because it is being agreed on. However,I’m convinced that all participants in this project both shareholders and creditors are sure to provide required financial resources for the project.

Question: May I ask you a final question? It deals with Mechel. You said repeatedly that VEB was not interested in saving this company. As of today, are you as Chairman and your deputies participating in any consultations on supporting this company. A rumor gets around that VEB might participate in some sort of scheme for buying out a railway from Mechel on the part of RZhD (Russian Railways).

V.Dmitriev: Neither my deputies nor I are holding such talks with Mechel and RZhD.

Thank you.

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Vladimir Dmitriev’s comments to Interfax Agency following a meeting on measures for state support for Vnesheconombank

24 september 2014 года
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The first stage of VEB’s additional capitalization worth 30 billion rubles will make it possible for the Bank to meet standards – Dmitriev

September 24. INTERFAX-AFI – Vnesheconombank’s additional capitalization that was discussed on Tuesday with Prime Minister Dmitry Medvedev would allow Vnesheconombank to meet financial sustainability standards, said Vnesheconombank Chairman Vladimir Dmitriev.

Two sources familiar with the course of the meeting told Interfax on Tuesday night that a decision had been made to commit 30 billion rubles to VEB to maintain liquidity. V.Dmitriev confirmed this figure.

“The decisions made would allow VEB to rely on a systemic and sustainable state support which would ensure through measures being taken including the first stage in the amount of at least 30 billion rubles the Bank’s dynamic development and would enable it to meet basic financial sustainability standards. These measures are designed to enable the Bank to meet its obligations to Russian and foreign creditors and investors and increase volumes of its credits to fund nationally significant investment projects, support exportsand small and medium-sized enterprises”, said V.Dmitriev.

In response to a request to comment on mass media information about VEB’s potential sale of3.15% of RusAl’s shares:At present, we are not discussing an issue of selling blocks of shares or other non-liquid assets owned by VEB. VEB didn’t announced such initiatives because it is fully aware that their sale at market prices will be lossmaking. Kommersant reported on Tuesday with reference to its sources that VEB could sell its stake in RusAl to increase its capital. Russian depository receipts for shares of the company lost 8.4% at a trading session on fears that VEB’s stake will be sold.

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Russian Prime Minister Dmitry Medvedev conducts a meeting on Vnesheconombank’s additional capitalization

23 september 2014 года
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D.Medvedev: “There is a need for Vnesheconombankto maintain required volumes of support for the national economy in the current situation when the country’s economic policy relies above all on domestic sources of funding”.

Dmitry Medvedev’s opening address:

Today, our meeting is devoted to Vnesheconombankand issues related to its current standing and its potential additional capitalization. Naturally, the reason for it is that Vnesheconombank is a leading and the most important development institution in our country operating under a special law.It commits financial resources for modernizing the Russian economy and stimulating inflow of investments. The Bank plays a special role on the long-term funding market.

In the recent years, Vnesheconombank has been instrumental in implementing quite a few large-scale projects, which are designed to overcome infrastructure restrictions, boost natural resources utilization efficiency, support industrial exports, stimulate the development of territorial clusters and as a whole address serious objectives of the country’s development.

I’d like to mention such important projects as the construction of the Boguchan Hydroelectric Power Plant as well as Sheremetjevo-3 and Pulkovo terminals, the Western High-Speed Diameter, the Khabarovsk oil refinery's modernization, the development and manufacturing of our SukhoiSuperjet 100.

Moreover, Vnesheconombank became a major creditor of a whole number of construction projects including the Olympic construction project. Its efficient financial support helped to successfully implement infrastructure projects in Sochi although in a number of cases we had to make pretty difficult decisions and Vnesheconombank had to make such difficult decisions too.

D.Medvedev: “Vnesheconombank became a major creditor of a whole number of construction projects including the Olympic construction project. Its efficient financial support helped to successfully implement infrastructure projects in Sochi”.

In general, we should admit that the Bank’s participation in this kind of projects was necessary and justified.Until recently, the Bank has succeeded in raising credit facilities on international markets to fund investment projects. Now, as you know, the situation has changed – our partners not only refuse to participate in this kind of projects but limit activities of a number of banks. Nevertheless, Vnesheconombank remains to be a quality borrower and an efficient creditor.There is a need for Vnesheconombankto maintain required volumes of support for the national economy in the current situation when the country’s economic policy relies above all on domestic sources of funding” and on such approaches which should allow us to create advanced, quality products and support exports. All this is of primary importance now, so my proposal is to discuss these issues today at our meeting.

Origin: Internet-Site of the Government of the Russian Federation

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On the results of Vnesheconombank’s participation in the 13th International Investment Forum Sochi-2014

22 september 2014 года
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In the course of the 13th International Investment Forum Solchi-2014б Vnesheconombank Chairman Vladimir Dmitriev spoke at the following panel discussions: “How to better understand China and Russia’s housing and utilities: New conditions for private investing”.

In the course of the Forum Vnesheconombank Group’s institutions entered into the following agreements:

  • Vnesheconombank signed an agreement with the Government of the Yaroslavl region. The parties intend to cooperate in developing investment projects including those to be implemented on the terms of public private partnership, they also intend to develop potential options of their funding and cooperate in preparing projects conclusion as well as participate in raising funds to support small and medium-sized enterprises.
  • Vnesheconombank, the Government of Dagestan, the Russian Direct Investment Fund (RDIF, VEB Group), OJSC the Caspian Flat Glass Plant entered into an agreement on cooperation to further advance a project on the construction of a flat glass plant on the territory of the Republic of Dagestan (the village of Tube, the Kumtorkalin district).
  • Vnesheconombank and OJSC Sberbank of Russia signed an agreement on cooperation in developing and supporting Russian exports.

The Federal Project Finance Center (FPFC, Vnesheconombank Group) and LLC Plaza Hotel signed an agreement of Intent to form an investment project “Construction of a Tourist Camping-Park “KazachyaStanitsa. It is to be prepared by a partnership established by the parties. Under the project, they plan to operate a multifunctional campingб which does not have any analogues in the region. It is to be comprised of a bio park, sports park, fair and festival zone, camping and 2parkings.

The Federal Project Finance Center and OJSC the Khabarovsk Energy Systems signed an agreement of intent to form investment projects on the comprehensive development of heat and energy supplyыныеуьы in the Khabarovsk Territory. The agreement provides for preparing projects to reconstruct and construct energy sources to transfer to gas fuel and reconstructing distribution networks in municipal districts. To this end, the parties to the agreement are to prepare a Plan for Comprehensive Development of the Heat Supply System in the Khabarovsk Territory and make efforts to search for and engage investors and partners to implement the project.

 

Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru

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VEB Group participates in funding the project on the construction of a flat glass plant in Dagestan

20 september 2014 года
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In the course of the 13th International Investment Forum Sochi-2014, Vnesheconombank, the Government of Dagestan, the Russian Direct Investment Fund (RDIF, VEB Group), OJSC the Caspian Flat Glass Plant entered into an agreement of intent to cooperate in enhancing investment activity.

On behalf of Vnesheconombank the agreement was signed by Chairman Vladimir Dmitriev.

VEB is the main creditor of the project on the construction of a flat glass plant on the territory of the Republic of Dagestan (the village of Tube, the Kumtorkalin district).

In its turn, RDIF (VEB Group) is exploring the possibility of investing funds in a major manufacturer of glass products. Investments to be raised could be used by OJSC the Caspian Flat Glass Plant for purchasing and commissioning high technology equipment to manufacture high-value added products that do not have national analogues and have a high export potential.

The parties have agreed to cooperate in advancing the project, the implementation of which would contribute to Dagestan’s socio-economic development and would give an impetus for the development of the entire region.

The project on the construction of the Caspian flat glass plant provides for creating an advanced high technology production facility to manufacture transparent glass, tinted glass and reflective glass by float method with a capacity of 600 tons a day. The plant’s construction total value is 10.5 billion rubles, with VEDB’s participation share being 7.8 billion rubles. The project gives high priority to both import substitution and to export of up to 40% of products including to CIS countries. At present, the project’s main production facilities have been put into operation, the plant is now at the stage of achieving rated capacities.

 

Press Office of Vnesheconombank
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru

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