Battle for points

VEB raised almost $1.5 billion for SIBUR

SIBUR and Vnesheconombank yesterday concluded the largest project financing deal in the country's history - a petrochemical holding company implementing a polymer production project in Tobolsk received a loan of $1.44 billion. The terms of the agreement signed yesterday by the company's president Dmitry Konov and VEB chairman Vladimir Dmitriev, are not disclosed. According to Mr. Konov, “they are beneficial for both parties.” “This is financing that will make the project profitable and resistant to changes in external conditions,” said the president of SIBUR.

The loan for the Tobolsk project consists of two parts. As VEB explains, $1.22 billion was provided for 13.5 years under guarantees from export insurance agencies of those European countries where SIBUR is purchasing equipment for the new complex. The bank raised this money from international financial institutions. Documents on this were signed last year during the visit of the country's President Dmitry Medvedev to Italy. “The governments of European countries are interested in cooperation between national companies and foreign partners and thus stimulate business ties,” a representative of the holding, Rashid Nureyev, told Vremya Novostey yesterday. Another $221 million was issued in the form of a credit line for a period of nine years.

The parties do not disclose at what percentage the funds were provided. SIBUR noted that the conditions can be considered favorable: “The rates on such loans are significantly lower than ordinary commercial ones.” Mr. Dmitriev also noted that during the negotiations VEB managed to achieve the most preferential terms for SIBUR: “There was a battle for every percentage point, for hundredths of a percent, so that the project would pay off.”

SIBUR has been implementing its largest project for two years now. It is expected that the capacity of the future plant will be 500 thousand tons of polypropylene (various films, pipes, electrical insulating materials, etc. are made from it) per year. As SIBUR explained yesterday, large-sized equipment is planned to be delivered to the site from the third quarter of 2010 to the fourth quarter of 2011, and the commissioning of the complex is planned for the last quarter of 2012.

SIBUR has already contacted VEB for help. In February 2009, the company applied to the bank for a $100 million loan it needed to refinance foreign loans. However, SIBUR changed its mind and withdrew the application. But then the holding’s appetite increased, and it was decided to negotiate with VEB to help finance the construction of the country’s largest polymer production project in Tobolsk. Its cost was initially estimated at 65 billion rubles. “Now this figure is less than previously announced,” Mr. Konov said yesterday. SIBUR notes that at the moment the company has already invested more than $400 million in the construction of the plant. VEB emphasizes that the project is not only aimed at increasing the efficiency of the use of hydrocarbon raw materials and exporting products with high added value, but will also significantly increase the volume of associated petroleum processing oil gas, which will have a positive impact on the ecology of the region.

Kirill MELNIKOV