On Signing Agreements between Vnesheconombank, OJSC VEB-Leasing and OJSC Sovcomflot

In the course of the 14^th Petersburg International Economic Forum, State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’, OJSC VEB-Leasing and OJSC Sovcomflot signed Agreements on financing the purchase and further operation of two tankers designed to service oil fields on the Russian continental shelf in the Barents Sea.

On behalf of Vnesheconombank the Agreements were signed by Vnesheconombank Chairman Vladimir Dmitriev, on behalf of OJSC VEB-Leasing - by its General Director Vyacheslav Ivanov, on behalf of OJSC Sovcomflot – by its General Director Sergei Frank.

The Agreements provide for Vnesheconombank to extend a credit to VEB-Leasing to purchase two shuttle tankers “Mikhail Ulyanov” and “Kirill Lavrov” constructed at OJSC Admiralty Shipyards (Saint-Petersburg). The tankers are to be transferred to long-term lease, with ownership to be assigned to OJSC Sovcomflot.

At the signing ceremony, Vnesheconombank Chairman said: “Providing support for high-technology projects of the domestic shipbuilding is one of Vnesheconombank’s top-priority lines of activity. Vnesheconombank will provide financing worth 200 million dollars for a period of 7 years in line with market conditions and the best world practice applicable to shipping to OJSC Sovcomflot - a reliable borrower with a high credit rating.

OJSC General Director Sergei Frank aid said: “Up until now foreign banks’ credits have been OJSC Sovcomflot’s main sources of borrowings. The Agreement signed is a major project to lease tankers. It would not only promote the development of the domestic shipbuilding but would also allow OJSC Sovcomflot to expand a range of services it offers to Russian cargo owners – leading oil and gas companies and this is fully in line with Company’s strategy for a period of up to 2015.

The first tanker “Mikhail Ulyanov” was commissioned in February of 2010, the second one - “Kirill Lavrov” is scheduled to be delivered to its customer in the first half of 2010.

This project is an example of successful cooperation between Russian cargo owners, shipbuilders, ship owners and bankers.

Panamax size tankers “Mikhail Ulyanov” and “Kirill Lavrov” with deadweight of 70000 each are designed to transport oil and gas condensate from the Prirazlomnoye oil field (the Barents Sea), the project’s operator is Gazprom Neft Shelf. The tankers of the series were built subject to the Rules of Dual Registry of the Russian Maritime Register of Shipping and Lloyd’s Register. Under the classification of the Russian Marine Shipping Register the tankers were assigned ice class ARC6, which allows them to navigate on their own in the ice up to 1.3 meters thick.

Upon constructing these Arctic shuttle tankers, unique design solutions were used making it possible to operate these vessels in a safe mode in difficult climatic conditions of the Arctic seas. Arctic shuttle tankers apply the principle of double action using an ice-breaking stem in heavy ice and a bow for open water. The tankers are equipped with two Azipod propulsion units (a 360-degree rotary azimuth electric steering system with a total capacity of 17 megawatt, a satellite dynamic positioning system, a helicopter pad, a bow loading system, a unique heat-insulation and heating system for all hull systems.

State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ was established in 2007 subject to the Federal Law of the Russian Federation “On the Bank for Development “through reorganizing Vnesheconombank of the USSR.

Vnesheconombank is a key instrument for pursuing the government’s economic policy aimed at overcoming economic growth infrastructure restrictions, enhancing natural resources utilization efficiency, developing high-technology industries, unlocking production and innovation potential of small and medium-sized enterprises and providing support for industrial exports and services.

Sovcomflot Group of Companies is one of Russia’s largest infrastructure companies. Its fleet comprises more than 143 vessels with a total deadweight of 10 million tons, the current shipbuilding program includes 10 vessels with a total deadweight of 0.8 million tons.

• The average age of the tanker fleet is about 7 years (the world’s average indicator is 12 years).
• The Company owns the world’s biggest ice-class fleet and it is number one operator of Arctic shuttle tankers and ice-class gas carriers.
• the Company provides its customers not only with hydrocarbons transportation services but also transships crude oil through floating oil storage facilities, takes an active part in developing effective logistic schemes for energy resources transportation across the Arctic region, inter alia, renders procurement services for drilling and production platforms using specialized procurement vessels and is responsible for technical management of vessels.
• In 2009, Sovcomflot entered an important business segment related to rendering procurement services for drilling rigs with the use of procurement vessels.
• The Seatrade Global Performer 2010 Award was presented to Sovcomflot in recognition of its pioneering work with Arctic ice-breaking tanker operations.

OJSC VEB-Leasing has been operating on the Russian market since 2003 and is among Russia’s largest leasing companies. According to the leasing companies rating prepared by RA Expert for 2009, OJSC VEB-Leasing took first place by the amount of new business and was among three largest Russia’s leasing companies by the amount of leasing portfolio. State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ is OJSC VEB-Leasing’s principal shareholder. Fitch Ratings assigned an international credit rating of BBB with positive outlook to OJSC VEB-Leasing.

Press Office of Vnesheconombank
Contact person: Ekaterina Karasina
Phone: +7 (495) 608-46-93, Fax: +7 (499) 975-21-34
E-mail: press@veb.ru