Russia’s VTB to develop strategy of bailing out RusHydro’s unit
MOSCOW, Jul 17 (PRIME) -- Russia’s second largest bank VTB has signed an agreement to increase capital of hydropower giant RusHydro in order to refinance debt of the latter’s unit RAO ES Vostoka, and now the bank is working on a strategy to bail out the troubled unit, a representative for the bank told PRIME Friday.
“VTB and RusHydro are continuing constructive dialogue and are jointly working on a strategy aimed at improving the company’s financial condition and increasing its capitalization. Currently, the sides have signed a term sheet with main conditions,” the representative said.
As of July 1, RAO ES Vostoka’s debt amounted to 87.92 billion rubles, and its parent company has been holding talks with the unit’s main creditors Sberbank, VTB and Gazprombank over the issue.
Gazprombank First Vice President Yekaterina Trofimova told PRIME that the bank is holding talks with RusHydro on possible participation in the capital injection. Sberbank declined to comment.
Earlier on Friday, business daily Kommersant reported citing sources that the company and VTB Bank have agreed that the bank will invest up to 85 billion rubles in RusHydro’s new shares and will receive an up to 20% stake in the company’s capital.
In June, RusHydro CEO Yevgeny Dod said Sberbank, VTB and Gazprombank may receive an up to 20% stake in the company under the capital injection plan as a consortium or as separate entities, and possible provision of 44.5 billion rubles of state guarantees from the Finance Ministry on the deal was being discussed.
(56.9504 rubles – U.S. $1)
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