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Sberbank of Russia confirms refinancing of Belaruskali’s $1bn loan

MINSK, 25 September (BelTA) - Sberbank of Russia has confirmed the refinancing of the $1 billion loan issued to the Belarusian company Belaruskali. The information was released by Sberbank of Russia Chairman of the Board German Gref after meeting with President of Belarus Alexander Lukashenko on 25 September, BelTA has learned.

German Gref said: “We have discussed the refinancing of our loan to Belaruskali. I hope that today, in the afternoon we will sign the relevant protocol of intent with the chairman of the government and an agreement with Belaruskali after that. We have found the solutions that our colleagues from Belaruskali had sought from us”.

In December 2011 OAO Belaruskali received a $1 billion syndicated loan from Sberbank of Russia and the Eurasian Development Bank for one year. Sberbank’s share was $900 million, with the rest covered by the Eurasian Development Bank. The loan was taken against double security, namely guarantees of the Belarus government, which, in turn, were secured by a pledge as large as 51% of OAO Naftan shares. During negotiations Sberbank insisted on a pledge as large as 35% of OAO Belaruskali shares. The interest rate for the first six months was LIBOR (1.1%) combined with 7.6% per annum. After the first six months the interest rate was supposed to be raised by 0.3%.

The loan was transferred to Belarus’ gold and foreign exchange reserves by Belaruskali buying $800 million worth of long-term government bonds. Following an initiative of the National Bank of the Republic of Belarus the company sold the rest of the loan via the currency exchange.

Earlier Belaruskali’s management said they were intent on prematurely repaying the $1 billion loan in one go on 20 September 2012. The company notified OAO Sberbank of Russia, which is the agent of the deal, about the intention. The bulk of the loan ($800 million) was supposed to be repaid by a pre-schedule redemption of the Finance Ministry’s foreign currency bonds that the company had bought. The company intended to pay the rest of the sum using its own sources.

At the same time the company mentioned the possibility of getting the loan refinanced. Negotiations have been held, including negotiations with Sberbank of Russia. OAO BPS-Sberbank Chairman of the Board Vasily Matyushevsky said in late July that Sberbank of Russia had prepared a new, very interesting offer regarding the conditions of refinancing the loan.

The Soligorsk-based company OAO Belaruskali is one of the world’s top manufacturers of potash fertilizers. The company was incorporated as a joint-stock company in 2012. Belaruskali accounts for about 15% of the global output of potash fertilizers and over 16% of the global export of potassium.