MOSCOW, July 18 (Reuters) - Russian Prime Minister Vladimir Putin told state-controlled bank VEB on Saturday it should not roll over indefinitely loans granted last year to domestic firms allowing them to refinance foreign borrowing, Interfax reported.
'This was a timely measure, and we went into it with open eyes amid the global financial crisis,' Putin told VEB Chairman Vladimir Dmitriev.
'At the same time, clients of the bank should understand that these loans will not be extended forever.'
Dmitriev said VEB loaned about $10 billion to Russian corporations in order for them to refinance outstanding debt, and that Rosneft had already repaid its $577 million loan early, Interfax reported.
VEB last month agreed to extend for one year the refinancing loans granted to aluminium giant UC RUSAL, steelmaker Evraz , billionaire Mikhail Fridman's telecoms arm Altimo and construction firm PIK,, banking sources told Reuters.
Dmitriev told Putin that extensions will be granted to all companies that have complied with the terms of the original loan.
VEB has prepared draft loan extension agreements that will be finalised using market interest rates, he added.
Russian companies borrowed heavily in order to expand abroad prior to the downturn, leaving them with $130 billion in debt due this year.
The Kremlin threw a life-line to some of the biggest debtors last year, granting VEB the right to distribute as much as $50 billion in refinancing help, but the programme was shut down in February after the government said no further help was needed. (Reporting by Alfred Kueppers; Editing by Victoria Main) (alfred.kueppers@thomsonreuters.com; Tel +7 495 775 1242; Reuters Messaging: alfred.kueppers@thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'This was a timely measure, and we went into it with open eyes amid the global financial crisis,' Putin told VEB Chairman Vladimir Dmitriev.
'At the same time, clients of the bank should understand that these loans will not be extended forever.'
Dmitriev said VEB loaned about $10 billion to Russian corporations in order for them to refinance outstanding debt, and that Rosneft had already repaid its $577 million loan early, Interfax reported.
VEB last month agreed to extend for one year the refinancing loans granted to aluminium giant UC RUSAL, steelmaker Evraz , billionaire Mikhail Fridman's telecoms arm Altimo and construction firm PIK,, banking sources told Reuters.
Dmitriev told Putin that extensions will be granted to all companies that have complied with the terms of the original loan.
VEB has prepared draft loan extension agreements that will be finalised using market interest rates, he added.
Russian companies borrowed heavily in order to expand abroad prior to the downturn, leaving them with $130 billion in debt due this year.
The Kremlin threw a life-line to some of the biggest debtors last year, granting VEB the right to distribute as much as $50 billion in refinancing help, but the programme was shut down in February after the government said no further help was needed. (Reporting by Alfred Kueppers; Editing by Victoria Main) (alfred.kueppers@thomsonreuters.com; Tel +7 495 775 1242; Reuters Messaging: alfred.kueppers@thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.