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  Wednesday, July 8, 2020
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Russian aluminum giant RusAl confirmed on Wednesday that it had obtained
Russian aluminum giant RusAl confirmed on Wednesday that it had obtained a $4.5 billion loan from the state development bank Vnesheconombank (VEB) to repay its foreign liabilities amid the credit crunch.

Russian and international financial media said late last month that VEB had approved the loan to RusAl, controlled by oligarch Oleg Deripaska, to repay 11 foreign banks.

RusAl said the funds would be used "to repay a loan received from a syndicate of Western banks in April 2008 to buy 25% plus two shares in mining and metals enterprise Norilsk Nickel."

Russia has been hard-hit by the global credit crisis, which has toppled Western banks and pushed developed economies into recession. The country's stock markets have lost around two thirds of their value since their May highpoints, amid declining oil prices and other investor concerns.

Russia's government and Central Bank have recently taken urgent measures to pump billions of U.S. dollars into the domestic stock market to shore up the liquidity of leading market makers.

In particular, the Central Bank has granted $50 billion in subordinated loans to Russian companies and banks via VTB to help them refinance their foreign liabilities.

RusAl, established in March 2007 through a merger of Russian aluminum giants RusAl and SUAL and Swiss Glencore's alumina assets, said the VEB loan had been granted for a term of 1 year with an extension option at Libor + 5%. RusAl has provided 25% of shares in Norilsk Nickel as collateral for the loan.

RusAl's liabilities amount to $14 billion.

In a separate statement also on Wednesday, RusAl said it had repaid the $4.5 billion loan to the 11 Western banks.


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