18 Nov 2009 20:06

Kudrin says 1 trillion ruble cost estimate for VEB incorporation too high

MOSCOW. Nov 18 (Interfax) - The Russian Finance Ministry has not yet received proposals on funding the cost of corporatizing Vnesheconombank (VEB), but thinks the 1 trillion rubles suggested earlier is too high.

"This funding hasn't been planned for next year, but I don't think that much will be needed," Deputy Prime Minister Alexei Kudrin, who is also the country's finance minister, told reporters.

Kudrin said he thought incorporating VEB would generally be possible.

VEB chief Vladimir Dmitriyev said earlier this week that the bank would need an additional 1 trillion rubles or more in the way of recapitalization in order to fulfill banking legislation if it is to be corporatized.

"We're prepared to incorporate tomorrow, but we'd need more than 1 trillion rubles in extra capitalization to eliminate any distortions to do with exceeding limits per borrower and meet certain other Central Bank requirements," he said.

State corporations have no future in their present forms, Russian President Dmitry Medvedev said in his address to the Federal Assembly last week. "I consider this form generally has no prospects in today's conditions," he said.

VEB, the Russian Technologies (Rostekhnologii) corporation and nanotechnology corporation (Rusnano) may be converted into stock companies as early as next year, presidential aide Arkady Dvorkovich told journalists on November 11.

Central Bank First Deputy Chairman Alexei Ulyukayev told reporters on Monday that he thought corporatizing VEB would be a "very complicated process" that had be approached carefully.

"VEB is a financial organization with very many foreign economic ties. Mere talk of turning it into an OJSC could change the attitude of creditors, interest rates and whether credit agreements are approved," Ulyukayev said.