Vnesheconombank Chairman Vladimir Dmitriev’s Briefing on the Results of Vnesheconombank’s Supervisory Board Meeting

8 october 2009 года
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TV Channel Vesti-24
08.10.2009

HOST: Now Vnesheconombank Chairman Vladimir Dmitriev’s briefing is starting at the House of Government. Our channel is telecasting the briefing live.

Vladimir DMITRIEV, Vnesheconombank Chairman: At our Supervisory Board meeting we discussed an issue of developing Vnesheconombank’s subsidiary banks and above all GLOBEX and Svyaz-Bank. We also discussed banks incorporated in Vnesheconombank as development institutions — Roseximbank and the Russian Development Bank. We approved their core activities as a whole. Having been reorganized such commercial banks as Svyaz-Bank and GLOBEX started to operate on a break-even basis. It is safe to say that they started to develop in a sustainable and dynamic way. As far as the future of these banks is concerned, we believe that in the long run they will be offered to the market either to strategic investors or through placing shares for Vnesheconombank to cover its expenses on reorganizing the banks and securing their sustainable financial development.

As far as the Russian Development Bank is concerned, it remains to be a key financial instrument for making government money available to small and medium-sized enterprises.

Russia’s export-import bank is the agent for the government in providing guarantee support for industrial exports. In this respect, we are also considering prospects for establishing a state-run export credits insurance agency. In any case, basic strategic plans relating to each of these banks will be submitted for consideration by Vnesheconombank’s Supervisory Board by the end of this year.

The second issue was associated with the fact that Vnesheconombank both in its capacity as a development institution and as an instrument for taking crisis management measures became an owner of both bad and solid industrial assets and shares and for the most part, it’s not typical for a bank of development to manage them. So, our idea is that VEB should set up a sort of specialized investment institution to which VEB could transfer these assets for management or into ownership for them to be capitalized, professionally managed or sold on the market in order to reorganize commercial banks on a break-even basis and make it possible for Vnesheconombank to generate acceptable incomes. This proposal was also backed. Our Supervisory Board made a decision on considering in the short term, till this year-end, specific measures for transferring these assets to this company with its organizational-staff structure with a view to considering this company’s potential for managing other assets which the state would deem it wise to transfer to it. And we’d like to stress that personnel formation is no less important than the creation of this institution. Therefore, we have stringent criteria for selecting managerial staff in terms of their professional competence and impeccable reputation placing great emphasis on statesmanlike approach to their work.

We also discussed a number of issues relating to refinancing Russian companies’ foreign debts. By the way, all the companies that were supported by Vnesheconombank with the Central Bank’s funds got their credits rolled over. A decision to roll over the credits was taken by Vnesheconombank’s Supervisory Board at the beginning of this June. And the main terms of the rollover are in line the Supervisory Board’s decisions, that is, they are market-oriented. So, the risk assessment of these companies in the current situation is in line with the market assessment and with the assessment of their risks by international creditors. In making our proposals we worked on the assumption that a number of Russian companies are at a final stage of their negotiations with the clubs of foreign creditors and there is no doubt that the Russian Government’s decision to roll over Russian companies’ debts would to a great extent influence Western creditors’ stance on restructuring these debts.

As far as Vnesheconombank’s core activities as a development institution are concerned we discussed the project aimed at building a large-scale shipbuilding production facility, the Primorsk shipyard, in Primorsk, not far from Vyborg. Now a decision has been taken to finance the project design work, the pre-project design work was financed by the project’s initiator. We agreed today that in order to secure this project’s success the government should make appropriate moves in parallel with efforts made by Vnesheconombank and its Supervisory Board. Here I mean the Investment Fund’s resources, certain aspects of customs tariff policy and a number of other key tasks. We are sure that the project has a good chance of success because Gazprom and Sovkomflot will place orders with this shipbuilding production facility. These orders include ships to be constructed under the program of developing the Russian shipbuilding industry, that is, ice class ships, liquefied gas ships, oil platforms, and ships with deadweight of more than a hundred thousand tons. Thus, within a week very important decisions were made on constructing new shipbuilding production facilities such as a new Far Eastern shipbuilding production facility on the basis of Zvezda plant as well as a production facility in the North-West of our country in the city of Primorsk.

We also discussed an issue of structuring a transaction in a project in the Olympic construction, this is a media-centre. We participate in this project together with the Krasnodar Territory Administration. Now we have determined participation amounts — Vnesheconombank accounts for 90 percent of investments and the Krasnodar Territory Administration — for 10 percent and the Administration is ready to consider an issue of extending the Territory’s guarantee for the project. The project’s budgeted value is not known yet because we plan to start financing project engineering work. In summary, I’d like to say that today we have done an excellent job in taking quite serious decisions that are crucial for many Russian companies and Vnesheconombank’s core activities. Thank you.

HOST: And now questions, please.

-Good afternoon, Vladimir Alexandrovich, Maxim Tovkailo, the newspaper Vedomosti. Information agencies have just reported that Gazpromneft was refused to get its credit rolled over. All other companies were allowed to get their credits rolled over, here I mean Sitronics, Altimo, EVRAZ, RUSAL, PIK. Can you confirm if this is so or not?

Vladimir DMITRIEV: I don’t have this sort of information. I can confirm that Gazpromneft got its credit rolled over.

-Is that really true?

Vladimir DMITRIEV: Yes, it is. And I can also confirm the fact that the terms and conditions as well as the terms and conditions of original agreements differ because in assessing risks Vnesheconombank takes into account objective market assessments with regard to a specific borrower. But I confirm that all the borrowers that requested us to get their credits rolled over received a go-ahead.

Did I get you right that additional terms and conditions are not related to interest rates alone, did you impose any additional terms and conditions?

Vladimir DMITRIEV: I haven’t said anything about it.

-Are there any additional terms and conditions for some companies besides increased interest rates?

Vladimir DMITRIEV: We haven’t changed basic parameters which were agreed upon and specified in the last year’s agreements.

-And now my final question. Not all companies that obtained your credits for refinancing their debts submitted applications for getting their credits rolled over. VEB has never made public the total number of companies that received the Bank’s credits for refinancing their debts. Can you tell us now how many companies received your credits?

Vladimir DMITRIEV: To my mind, this information is in the public domain. Except for Rosneft that repaid the credit all other companies are included in the said list. If you know something different, please let me know.

-Thank you very much

-Maria Knayzeva, RIA Novosti, good afternoon. May I ask three questions? Can you name companies for which interest rates on rolled over credits were raised and to what extent?

Vladimir DMITRIEV: No, I can’t

-The second question deals with VEB’s capital. Can you tell us what assets, both bank and non-bank ones, VEB is ready to transfer to a newly-established company.

Vladimir DMIOTRIEV: You know that under the Supervisory Board’s decision a new company, VEB-INVEST, was established. Bad assets bought out from GLOBEX-BANK were transferred to this company. In terms of reorganizing banks, above all, such as Svyaz-Bank, VEB has a number of assets that should be isolated and transferred to a professional team. There are also assets that VEB acquired in the course of taking crisis management measures with a view to selling them later or transferring them for professional management or returning them at a certain profit for Vnesheconombank. In order to manage assets efficiently you need a team of professional managers, a team of professional invest-bankers. In this sense, we do not intend to divert Vnesheconombank’s efforts and resources, instead, we are setting up a new company that should operate on the basis of self-recoupment and be responsible for bringing assets to a marketable state. For example, Amurmetall. We believe that this asset should be managed by professionals and VEB’s employees should focus on Vnesheconombank’s core activities. Here I mean assets as those of Kraslesinvest which is responsible not only for implementing a major project aimed at building the Boguchan hydropower station (to my mind our stake there is about twenty five percent) but also the projects to build a pulp and paper mill and a large-scale timber-industrial complex. We’ve got this sort of assets. Moreover, we have also shares on our balance sheet owned by such companies as Rostelecom and EADS and a number other assets, which in our opinion can be managed by a specialized investment company. Having made a decision to establish such a company Vnesheconombank’s Supervisory Board expects concrete proposals for transferring assets to balance sheet or for management to be submitted to the Supervisory Board later.

-I wonder if Svyaz-Bank and GLOBEX will be transferred to this company or not. Have you got such plans?

Vladimir DMITRIEV: No, we haven’t got such plans. I’d like to stress it once more that the two banks have entered a stage of sustainable and financially sound development, their customer base and loan portfolio are on the rise. They are operating on a break-even basis increasing their profits dynamically. They are independent institutions and are almost hundred percent Vnesheconombank’s subsidiary banks.

-And now my last question. You’ve just said that VEB will finance the construction of a shipyard. How much money is VEB going to invest?

Vladimir DMITRIEV: The total amount of funds is about 38 billion rubles. The project is expected to be financed by Vnesheconombank, the Investment Fund and the project’s initiators. The project’s initiators are ready to invest twenty percent of this amount.

-And the remaining eighty percent will be invested by the Investment Fund and VEB?

Vladimir DMITRKIEV: Yes, that’s right.

-And what’s VEB’s participation amount?

Vladimir DMITRIEV: It’s about 60 percent.

-Thank you.

-Newspaper Gazeta, Andrei Birykov. Vladimir Alexandrovich, have you discussed an issue of AvtoVAZ? Is VEB going to provide financial assistance to AvtoVAZ? And if it is, what’s the amount of this assistance?

Vladimir DMITRIEV: We haven’t discussed an issue of AvtoVAZ today. But VEB is the creditor of AvtoVAZ and at the same time our subsidiary banks just a year ago were among the first ones that provided emergency support to AvtoVAZ. Here I mean GLOBEX and NTB.

-Are you discussing a issue concerning VEB’s possible purchase of bonds worth 40 billion rubles?

Vladimir DMITRIEV: Yes, we are.

-Thank you.

-Another question. Today the Prime Minister made public a figure of 11 billion rubles. This is the total amount of credits that were extended. He also said that borrowers were repaying these credits properly. Can you tell us how much money out of the said 11 billion rubles has been returned to VEB?

Vladimir DMITRIEV: Whereas the credits were extended a year ago and they were serviced properly the most part of credits.

-The most part — is this more than a half?

Vladimir DMITRIEV: I can’t give this figure now.

Thank you.

-Thank you

Vladimir DMITRIEV: It’s not a matter of repayment; it’s a matter of servicing. Credits are repaid at the end of credit period. And they are being serviced properly. If they had been repaid it would make no sense to talk about rolling them over.

-Thank you.

HOST: Any more questions? Thank you very much.

Vladimir DMITRIEV: Thank you.

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On Suspending Accepting Applications for Obtaining Subordinated Loans

5 october 2009 года
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Subject to Federal Law dated October 13, 2008 № 173-FZ “On Additional Measures for Supporting the Financial System of the Russian Federation” State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ is responsible for extending subordinated loans to Russian lending institutions.

The total amount of such loans was determined by Federal Law dated July 17, 2008 № 168-FZ and is 410 billion rubles.

Vnesheconombank’s Supervisory Board made decisions on extending subordinated loans to 17 banks for a total amount of 391.8 billion rubles. At present, Vnesheconombank is considering 20 applications for a total amount of 95.02 billion rubles.

In this connection, Vnesheconombank suspends accepting Russian banks’ new applications for obtaining subordinated loans.

 

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

 

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On Opening the Industrial Park Biek Tau (the Republic of Tatarstan)

30 september 2009 года
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A ceremony to open the Industrial Park Biek Tau was held in the Republic of Tatarstan. The Park is the largest world’s class production-logistics complex. In attendance of the ceremony were Tatarstan’s Prime Minister Rustam Mannikhanov, Russia’s Deputy Transportation Minister Oleg Belozerov, Management Board Member – Vnesheconombank Deputy Chairman Anatoly Ballo, CJSC Logopark Biek Tau Board Chairman Artur Trofimov.

The rated capacity of the Biek Tau Production-Logistics Class “A” Complex is 260 thousand square meters and it makes it possible to place state-of-the art high-technology production lines and handle up to 9.5 million tons of cargoes per year. The floor space of the Industrial Park’s facilities is 159 thousand square meters. A modern infrastructure has been built on the territory of the Biek Tau Park: a boiler house, an electric power plant, a gas insulated substation and water tower station. The implementation of the project will create 2.5 thousand new jobs. The Biek Tau Industrial Park is expected to achieve planned figures of earnings by the end of 2010, and in 2011 the construction of the third building of 100 thousand square meters is to continue, with investment amount being 2.3 billion rubles.

Up until now more than 5 billion rubles have been invested in the project, with 3 billion rubles out of them accounting for Vnesheconombank’s funds and 2 billion rubles for CJSC Logopark Biek Tau’s funds. The Agreement between Vnesheconombank and CJSC Logopark Biek Tau on financing the construction of the Industrial Park was signed in the course of the 7th International Investment Forum Sochi-2008.

Biek Tau is one of the first facilities of Vnesheconombank’s long-term program of financing industrial infrastructure. The facility is located at the intersection of West-East and North-South international transport corridors and this would help to develop their infrastructure, increase freight traffic running through Russia’s territory and promote the export of transport services.

As of today, Vnesheconombank’s corporate governance bodies have made decisions to finance more than 30 infrastructure projects worth about 540 billion rubles, with the Bank’s participation share being more than 260 billion rubles. 23 projects worth about 327 billion rubles with the Bank’s participation of about 200 billion rubles started to receive financing. The total amount of funds provided by Vnesheconombank is in excess of 70 billion rubles. Revenues to budgets of all levels under infrastructure projects being already financed by Vnesheconombank will amount to about 200 billion rubles for a period of their implementation. About 28 thousand new jobs are planned to be created.


 

Origin: Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
Phone: +7 (495) 608-43-93, Fax: +7 (499) 975—21-34
E-mail: press@veb.ru

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On Signing Agreement on Cooperation with the Government of Buryatia

30 september 2009 года
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State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ and the Government of the Republic of Buryatia entered into an Agreement on Cooperation.

On behalf of Vnesheconombank the Agreement was signed by Vnesheconombank Chairman Vladimir Dmitriev, on behalf of the Government of the Republic of Buryatia – by its Chairman Vyacheslav Nagovitsyn.

The Agreement provides for establishing a strategic partnership and promoting a long-term, effective and mutually beneficial cooperation in the investment activity.

The Agreement provides for the parties to cooperate in addressing high-priority objectives of the region’s socio-economic development. Under the Agreement the parties intend to jointly participate in raising funds to finance investment projects planned to be implemented in the Republic of Buryatia. High priority is to be given to projects in construction, agro-industrial complex and metal-making industry.

A list of projects is to be determined annually based on the Strategy of the Republic’s Socio-Economic Development up to the year 2025, the Program of Buryatia’s Socio-Economic Development for 2008-2010 and Vnesheconombank’s core activities.

The implementation of this Agreement would help encourage investment activity aimed at boosting the region’s industrial, socio-economic and infrastructure potential.

 

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

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Russian Prime Minister V.V. Putin Meets Chairman of State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ V.A. Dmitriev

30 september 2009 года
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Transcript of the meeting’s beginning

V.V.Putin: Vladimir Alexandrovich, how is work proceeding on implementing your main projects?

V.A.Dmitriev: In general, we are working in accordance with the decisions taken by the Supervisory Board. In this respect, I’d like to inform you on the progress of implementing the project approved by the Bank’s Supervisory Board at its latest meeting. The project is aimed at building a terminal in Ust-Luga.

V.V.Putin: On the port as a whole.

V.A.Dmitriev: We made a decision to increase the financing amount to 550 million dollars. I was in Ust-Luga last week and I flew all over the district and I can tell you that the project is at a high level of preparation, here I mean berthing facilities, storage reservoirs, overhead roads. One overhead road is completed; foundations were laid for another two overhead roads for oil products transshipment facility and the port infrastructure. Administrative buildings and the custom house are at the highest level of preparation. We have enough grounds to believe that a transshipment facility with a capacity of 12 million tons will be commissioned next spring.

V.V.Putin: Where do you have problems there? How do they address problems in infrastructure, approach roads and channels?

V.A.Dmitriev: As far as infrastructure is concerned, some progress is being made with regard to railways, and the problem is going to be addressed properly.

In fact, we are coming up against problems associated with laying a high-voltage power transmission line, because the results of geological works performed earlier are not in line with the real situation. So, relevant decisions had to be made and technological solutions found would make it possible to address this problem comprehensively till next spring.

V.V.Putin: A deep channel?

V.A.Dmitriev: A deep channel is also being made and the work is being performed simultaneously with piling earth. In fact, while piling earth for berthing facilities they are making room for a deep channel.

V.V.Putin: Vladimir Alexandrovich, it’s not entirely your sphere of competence but for the money invested by the Bank to be used efficiently and to pay its way at proper time and for the project in all its aspects to be launched in due time and operate in the most efficient way you should address these problems comprehensively and completely with the Transportation Ministry.

V.A.Dmitriev: We are working in close contact with the Transportation Ministry, with the project’s initiators and with investors. The more so, this project is characterized by the fact that investors’ and the state bank’s participation share is 50 to 50. So, significant investments have been made.

V.V.Putin: By all sides?

V.A. Dmitriev: Yes.

V.V.Putin: It’s important for all these investments to be used efficiently.

V.A.Dmitriev: No doubt about it. And in this respect I’d like to bring up one more issue.  This is a new project in the field of civil shipbuilding. Besides the projects already approved for financing or those to receive financing in the near future, we started to comprehensively study a new Far Eastern project aimed at creating a Far Eastern shipbuilding center on the basis of the Zvezda plant.

This is a dry dock and a shipyard where they will produce tankers, gas carriers and drilling platforms. The project’s total value is 35 billion rubles and we plan that we’ll start financing it next year. We believe that construction work will start in the second quarter of the next year to be able to lay the first keel in 2011.

In our opinion, this is a very significant project in the Far Eastern region. It is of great economic and social importance, because it will create new jobs, generate tax revenues and will entail the development of parallel, related high-technology production facilities.

And, by the way, the Amurmetall plant will be given a good marketing outlet for its products.

V.V. Putin: Is the volume of orders going to increase?

V.A.Dmitriev: Yes, it is.

V.V.Putin: What’s your participation share there? Can you specify it numerically?

V.A.Dmitriev: As this project was initiated by the United Shipbuilding Corporation it is to be implemented on the basis of project financing. This means that for the most part it will be financed by Vnesheconombank. But taking into account orders from Gazprom, Rosneft Sovkomflot and a number of other companies the project’s payoff period might be 10-15 years. The project’s total value is 35 billion rubles.

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

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