Vekselberg’s Renova repays loans for $1bn amidst sanctions

Vekselberg’s Renova repays loans for $1bn amidst sanctions
Viktor Vekselberg

Billionaire Viktor Vekselberg has repaid loans in the amount of $1 billion taken from the Western banks. Earlier, his Renova Group had received state support from Promsvyazbank. Renova representatives say they have repaid the loan with the company’s own funds.

Billionaire Viktor Vekselberg and his Renova Group, who are facing sanctions imposed by the US, have repaid loans worth 1 billion Swiss francs ($1 billion) from banks, which include JPMorgan, Credit Suisse, and UBS. This is reported by Reuters referring to Renova and a source familiar with the situation.

In accordance with the US sanctions, the banks had to resolve problems related to cooperation with Renova until June 5. If the situation with loans was not dealt with within the specified period, banks could announce a forced sale of shares of the Swiss companies Schmolz + Bickenbach, Oerlikon, and Sulzer, which were held as collateral for loans.

“Problems with bank loans have been finally resolved,” the agency cites its source. According to them, some details are still being discussed, but “banks have received money.”

In December 2017, Renova’s investment structure Liwet Holding that owns shares of Swiss companies took a syndicated loan of 720 million Swiss francs from Natixis, Credit Suisse, ING, Deutsche Bank, JP Morgan, and UBS. In July 2016, one more Renova’s structure – Tiwel Holding – took a loan of 350 million francs from the same banks, except for UBS, Reuters reports referring to the Swiss regulator.

Typically, such transactions are confidential, however, the regulator published details of the agreements in documents exempting creditors from the obligation to conduct mandatory tender proposals for the redemption of shares.

According to this information, a pledge for a loan of 720 million francs was a 25.51% stake in Schmolz + Bickenbach and 41.35% in OC Oerlikon. The primary collateral for the loan of 350 million was 21.29% in Sulzer, while the secondary collateral was 42.14% in the same company – this share was also put in pledge under a loan from Sberbank.

A Renova representative told Reuters that the company has repaid the loans with its own funds.

Previously, the Ministry of Finance of Russia reported on Renova being supported by a market loan from Promsvyazbank. The loan was provided on a return basis in the second week of May. The Ministry assured that budget funds were not used. Before that, Renova had appealed to the Russian authorities for help in refinancing the loans received in the West.

Yesterday, May 19, it became known that Vekselberg’s Renova had reduced its stake in Liwet Holding, through which it owns Swiss assets. Vekselberg exchanged a part of the stake in Liwet for the assets of his partners Evgeny Olkhovik and Vladimir Kremer. In addition, Renova had established a separate structure, to which it had transferred a 16.63% stake in Liwet. As a result of these operations, the company’s effective share in Oerlikon has decreased from 43% to 19.9%, and from 42% to 12.6% in Schmolz + Bickenbach.

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