Reference
Government Resolution No. 420 has been drafted by the Ministry of Finance.
The federal law On the Federal Budget for 2013 and the Planning Period for 2014-2015 specifies the issuing of 110.5 billion roubles of state guarantees to secure loans and bonds for companies selected through a Government-approved procedure for attracting funding for investment projects or other purposes approved by the Government.
Government resolution No. 825 of August 14, 2012 sets out the rules for issuing state guarantees to secure loans and bonds for companies that attract funding for investment projects or other purposes approved by the Government in 2012. These guarantees are part of the Government’s policies aimed at promoting sustainable economic development.
The document extends the term of the resolution listed above through 2013.
The said state guarantees can be issued in Russian roubles or US dollars to secure loans or bonds with a maturity of 3-7 years and which are aimed at financing the operations or capital investment of Russian companies, as well as repayment of their previous loans and bonds used to finance operations or capital investment.
The state guarantees secure only part of the company’s liability to repay the loan or bond: up to 70% for strategically important companies in the defence sector and up to 50% for all others.
The rules also state that the guarantees should only be provided if the company has no other overdue financial liabilities to the Russian Government or tax debts.
The decision to provide a guarantee will be taken by the Ministry of Finance.
The state guarantees are provided to secure liabilities which will mature after January 1, 2016, therefore, this will not lead to additional federal expenditures in 2013-2015.
This resolution will create an effective mechanism for state support of companies that use loans to finance their operations.