China to issue Transneft another $5 bln of pipeline loan before year
ANKARA. Aug. 7. INTERFAX - By the end of the year, Transneft will receive the second $5 billion tranche of the Chinese loan that the company will use to finance the construction of pipelines in Russia, including the ESPO spur to China, company chief Nikolai Tokarev said.
Transneft signed the $10-billion loan agreement with China Development Bank (CDB) in February. The loan has a floating interest rate tied to LIBOR and must be repaid in 20 level installments that start five years after it receives the first tranche. Transneft has already received the first $5 billion of the loan.
Tokarev said at the end of June that the company might use the China Development Bank loan to refinance debt owed to Sberbank Russia.
"Sberbank today announced an 18 percent rate on the credit line. That is serious, since the credit that we have taken currently amounts to more than 100 billion rubles. And we are examining the outlook for using that [CDB loan] money to cover the liabilities on the Sberbank credit line," he said.
Transneft and Sberbank recently agreed to reduce the interest rate on the credit line to 13 percent annually from 18 percent.
Transneft has 30 billion rubles left on the 145-billion ruble credit line.