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Vneshtorgbank finances an UMMC-Holding project to build a five-star hotel in Yekaterinburg

 
6 June 2006

With a view to expand the co-operation with Ural Mining and Metallurgical Company (UMMC), Vneshtorgbank (VTB) will finance construction of a luxury class hotel complex in Yekaterinburg.

The Bank is going to invest USD 80.5 million to the project worth USD 163 million. Verkh-Isetsky Investment Building Company, which joined UMMC-Holding and was established for that particular purpose for a 11-year term under an UMMC Group guarantee, will make the funds.

Vneshtorgbank will finance the project by raising borrowings from foreign banks with Coface export credit insurance agency. BCNE-Eurobank, a Paris-based bank and a member of Vneshtorgbank Group since last December, and Societe Generale became French counterparties.

By developing partnership with metallurgical companies, Vneshtorgbank seeks an integrated approach to meet customers' demand at all stages of their growth and business diversification, offering them a range of banking products and services as broad as possible. The joint project with UMMC in the real estate business is a striking example of a multilateral and mutually satisfactory co-operation between VTB and domestic industry companies getting added benefits from the Bank's potential to raise cheaper foreign funding.

A five-star hotel construction in the centre of Yekaterinburg is a pioneer stage of a large-scale project implemented by UMMC-Holding to establish Yekaterinburg-City business complex where offices, hotels and trade centres will be located. Under the project, the hotel will have over 43,000 square metres of total space with 300 rooms, including 70 suites, and an underground parking for 135 cars, logistics and auxiliary areas. Hyatt International has been selected as the hotel's operator.

This project implementation is a further step towards the partnership development between VTB and metallurgical enterprises. The Bank regards the services rendered to such enterprises as its priority line of business. Under the strategy to extend co-operation with UMMC-Holding companies, the Bank decided to expand the credit limit to 15 billion roubles.

Documentary credit limits set by VTB on ferrous and non-ferrous metallurgical companies total about USD 3 billion.


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