On August 1, 2006, striving to expand its cooperation with the leading Russian car maker, Vneshtorgbank (VTB) set a lending limit for JSC AVTOVAZ and its subsidiaries totaling RUR 17 billion.
The decision was made within the framework of Strategic Cooperation Agreement signed by the Bank and the enterprise this April. It allowed the parties to add new dimensions to their partnership in all spheres of financial activities.
The limit set shall enable AVTOVAZ tap VTB's wide capacities in financing current and investment demands of the enterprise, as well as its export-import operations, which include raising foreign funds and applying the whole spectrum of instruments accepted in the international banking practice. Under the limit, the car maker will be able to raise funds maturing in 7 years, and part of operations can be implemented without any security provided. Also, the Bank will continue trading in AVTOVAZ securities and performing its Treasury operations.
Cooperation between the Bank and the largest Russian car maker started back in 2002. Last year, a number of operations were effected, among them - financing equipment imports for AVTOVAZ. Besides, during the years 2003 - 2005, VTB acted as an arranger of three bond issues of the enterprise totaling RUR 9 billion. In April, when the Agreement was signed, the credit limit set by VTB for AVTOVAZ and its subsidiaries was RUR 5 billion.