PRESS: Russian budget, cbank, treasury, state cos to save VEB

MOSCOW, Mar 30 (PRIME) -- The plan for financial recovery of Russian state development bank Vnesheconombank (VEB) includes acquisition of liquidity from the budget, the central bank, the Federal Treasury, state companies and the state Pension Fund, business daily Vedomosti reported Wednesday referring to the document.

On Tuesday, Prime Minister Dmitry Medvedev chaired a meeting of VEB’s supervisory board and said the government will inject 150 billion rubles into VEB’s capital to ensure its financial solvency. The financial recovery plan, which was prepared by new VEB CEO Sergei Gorkov, also includes other sources of liquidity to help the bank, which assets account for 9% of Russia’s gross domestic product (GDP), the daily said.

In particular, the measures include conversion of VEB’s debt to the central bank into a subordinate loan, which may be included into tier-2 capital; an additional 55 billion ruble deposit from the Federal Treasury; prolongation of the National Wealth Fund’s 50 billion ruble deposit which expires in June or a replacement by Gazprombank’s deposit; and new accounts from state-run companies and corporations, the daily said.

VEB expects to receive at least 100 billion rubles of pension savings as investments of the Pension Fund in the bank’s long-term bonds.

VEB is also ready to sell American Depositary Receipts (ADRs) of gas giant Gazprom, which account for a 2.7% stake in the company. It plans to sell troubled banks Sviaz-Bank, Globexbank, and Ukraine’s Prominvestbank, and to sell part of rail cars and planes owned by VEB-Leasing and transfer the remaining part to the state.

The allocation of 150 billion rubles of the budget money into VEB’s capital and the Federal Treasury’s deposit have already been approved, while other measures are under discussion, a source that participated in the meeting told Vedomosti. Some measures are considered as long-term ideas, the source added.

Medvedev’s press secretary Natalya Timakova redirected Vedomosti’s request for comments to VEB, while VEB, the Finance Ministry, the central bank and Gazprombank did not provide any comments.

(68.7549 rubles – U.S. $1)

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