INVOLVEMENT OF RUSSIAN BANKS AND OTHER FINANCIERS IN SENSITIVE SECTORS IN RUSSIA A RESEARCH PAPER PREPARED BY PROFUNDO FOR BANK TRACK NOVEMBER 2012 CONTENTS Summary ..........................................................................................................4 Introduction ..........................................................................................................8 Types of finance ..........................................................................................................9 Chapter 1 Financing trends in four Russian sectors..............................................12 1.1 Financing trends in the Russian coal mining sector............................................12 1.1.1 Sector overview .................................................................................................12 1.1.2 Largest companies..............................................................................................14 1.1.3 Groups of financial stakeholders ........................................................................15 1.1.4 Banks .................................................................................................................15 1.1.5 Shareholders......................................................................................................16 1.1.6 Investment banks...............................................................................................18 1.2 Financing trends in the Russian oil & gas sector ................................................19 1.2.1 Sector overview .................................................................................................19 1.2.2 Largest companies..............................................................................................20 1.2.3 Groups of financial stakeholders ........................................................................20 1.2.4 Banks .................................................................................................................21 1.2.5 Shareholders......................................................................................................22 1.2.6 Investment banks...............................................................................................24 1.3 Financing trends in the Russian pulp & paper sector.........................................25 1.3.1 Sector overview .................................................................................................25 1.3.2 Largest companies..............................................................................................26 1.3.3 Groups of financial stakeholders ........................................................................26 1.3.4 Shareholders......................................................................................................27 1.3.5 Banks .................................................................................................................29 1.3.6 Investment banks...............................................................................................29 1.4 Financing trends in the Russian gold mining sector ...........................................30 1.4.1 Sector overview .................................................................................................30 1.4.2 Largest companies..............................................................................................30 1.4.3 Groups of financial stakeholders ........................................................................31 1.4.4 Shareholders......................................................................................................31 1.4.5 Banks .................................................................................................................33 1.4.6 Investment banks...............................................................................................34 Chapter 2 EuroSibEnergo case study ..................................................................35 2.1 Company profile................................................................................................35 2.2 Financial structure of EuroSibEnergo.................................................................36 2.3 Equity ................................................................................................................37 2.4 Debt...................................................................................................................37 2.4.1 Bank loans..........................................................................................................37 2.4.2 Debt restructuring..............................................................................................40 2.4.3 Bond issues ........................................................................................................40 2.4.4 Bondholders.......................................................................................................41 -2- Chapter 3 RusHydro case study..........................................................................42 3.1 Company profile................................................................................................42 3.2 Financial structure of RusHydro.........................................................................42 3.3 Equity ................................................................................................................43 3.3.1 Share issues........................................................................................................43 3.3.2 Current shareholders..........................................................................................44 3.3.3 Possible changes in RusHydro’s shareholding structure ......................................46 3.4 Debt...................................................................................................................46 3.4.1 Bank loans..........................................................................................................46 3.4.2 Bond issues ........................................................................................................47 3.4.3 Bondholders.......................................................................................................48 Chapter 4 Sakhalin Energy Investment Company case study ................................50 4.1 Short profile.......................................................................................................50 4.2 Production and exports .....................................................................................51 4.3 Financing of the project .....................................................................................51 4.3.1 Project costs.......................................................................................................52 4.3.2 Credit facilities ...................................................................................................52 4.4 Future of the project..........................................................................................54 Chapter 5 Sberbank case study ..........................................................................56 5.1 Company profile................................................................................................56 5.2 Financial structure of Sberbank .........................................................................56 5.3 Key operations...................................................................................................57 5.3.1 Retail business ...................................................................................................58 5.3.2 Corporate business.............................................................................................58 5.4 Activities in economic sectors............................................................................59 5.4.1 Loan portfolio.....................................................................................................59 5.4.2 Securities underwriting ......................................................................................61 Chapter 6 Bank VTB case study..........................................................................66 6.1 Company profile................................................................................................66 6.2 Financial structure of VTB Bank.........................................................................66 6.2.1 Liabilites and equity ...........................................................................................66 6.2.2 Assets.................................................................................................................67 6.3 Key operations...................................................................................................68 6.3.1 Retail business ...................................................................................................68 6.3.2 Corporate business.............................................................................................69 6.4 Activities in economic sectors............................................................................70 6.4.1 Loan portfolio.....................................................................................................70 6.4.2 Securities underwriting ......................................................................................71 Chapter 7 Conclusions.......................................................................................76