Sberbank Arranging Syndicated Loans, Credit Facilities for Belarus

MINSK. Dec 11 (Interfax) - Sberbank (RTS: SBER) is arranging syndicated loans of $300 million and 5 billion Russian rubles for Belarus, Belarusian First Deputy Prime Minister Vladimir Semashko said at a meeting with German Gref, the Russian bank's chairman, prior to signing a package of agreements with Sberbank.

Sberbank signed an agreement with the Belarusian government Friday to buy 93.3% of BPS-Bank for $280.73 million.

They also signed an investment agreement to 2014 and a letter concerning the commitments made by the Belarusian side. The investment agreement states that Sberbank will open a credit facility of up to $2 billion for Belarus by 2014 and pay $340 million into the capital of BPS-Bank. The funds will be invested in the bank in stages by 2014, as the bank's assets grow.

The package of agreements signed on Friday includes a plan of joint action, by which Sberbank will arrange the syndicated loans and arrange a debut Eurobond issue of up to $2 billion for Belarus maturing in three-to-five years. Sberbank will also arrange the placement of up to 15 billion Russian rubles worth of Belarusian government bonds, also maturing in 3-5 years, on the Russian market. Sberbank might also issue loans directly to key Belarusian companies.

Sberbank's Gref said of the plan that "some formalities have to be completed early 2010." "Projects are already at the negotiating stage and they can be carried out fairly quickly," he said. "We're creating a public identity for Belarus on the public debt market," he said.

"We're investing a huge amount in the Belarusian economy and see the potential for it to develop and our business to grow. We're building a major financial bridge between Russia and Belarus. We'll do our best to achieve everything we have stated in our gentleman's agreement. We're trying to form a public debt market in Belarus. In the past we used to be negotiating partners, but now we're business partners," Gref said.

Sberbank will purchase 835.504 million BPS Bank shares for $0.336 each in 2009. The proceeds from sale of BPS Bank will be allocated to the National Development Budget Fund.

Sberbank and Belarus have spent much of this year negotiating the deal. Initially Sberbank expected to pay $150 million for BPS based on a valuation performed by Deutsche Bank. Belarusian officials wanted $450 million for the bank based on a valuation performed by a state organization.

Later, UK investment bank NM Rothschild & Sons carried out an appraisal utilizing three scenarios - optimistic, basic and pessimistic - that valued the bank in the range $150 million-$500 million.

BPS Bank was founded in December 1991. The State Property Committee owns 93.3% of shares and the overall state stake is 95.9%. The bank has a total of 18,102 corporate and individual shareholders.


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