Vnesheconombank Approves Procedure for Financial System Support
OREANDA-NEWS. October 15, 2008. Vnesheconombank Supervisory Board approves the Procedure for implementing measures provided for by clauses 1 and 2 of the Federal Law “On Additional Measures for Supporting the Financial System of the Russian Federation”.
Vnesheconombank (VEB) Supervisory Board approved criteria and the procedure for selecting companies to refinance their debts to foreign creditors. VEB Chairman Vladimir Dmitriev spoke about it after an extraordinary meeting of Vnesheconombank Supervisory Board. It is only companies operating on the Russian territory and in the real sector of the economy, he explained, that would be able to obtain funds for refinancing from Vnesheconombank. Their activity should be viewed as critically important for the Russian regions’ economy or strategic industries.
Companies that raised credits to implement investment projects or purchase assets on the Russian territory are entitled to request funds for refinancing foreign loans. Besides, in case of joint stock companies, they should raise co-financing all on their own, thereby sharing risks with the state, said V. Dmitriev.
A maximum amount of funds to be provided by Vnesheconombank (VEB) to Russian companies for refinancing foreign loans shall not exceed USD 2.5 billion per a single borrower. Vladimir Dmitriev also said that a minimum amount is fixed at a level of USD 100 million adding that such conditions are set forth in the Memorandum on the Bank’s Financial Policies, which stipulates that, a loan to be granted is not to exceed 25% of VEB’s charter capital.
VEB is to consider applications for refinancing foreign loans within a period of 18 days from the date of submission. V. Dmitriev explained that it would take 3 days to conduct a preliminary examination of an application, 10 days to conduct a comprehensive examination during which the Bank is to assess a borrower’s financial standing and review documents relating to an applicants’ foreign loan. A final decision on the outcomes of examination is to be made within 5 days, said V. Dmitriev. A great number of applications made it necessary to optimize the Bank’s organizational and personnel structure to process applications more efficiently.