VTB Bank and Sistema Public Joint Stock Financial Corporation have today announced a long-term financing agreement for RTI Group.
VTB Bank will become RTI Group’s key creditor with loans totalling RUB 28.5 billion. In 2016-2017, VTB is expected to refinance all of RTI’s debt, with the exception of defence procurement contracts covered by state guarantees.
Under the credit facility agreements, repayment of a substantial portion (approximately 60%) of RTI Group’s total debt) will be deferred until after 2021. The company will then repay its loans in annual instalments until late 2026 and will also benefit from discounted interest charges. The remaining debt will be refinanced through 5-year revolving credit lines, which is expected to enhance RTI Group’s flexibility in managing its working capital.
As part of the deal, Sistema will buy 15.32 percent of ordinary shares in RTI from VTB (the successor to the Bank of Moscow) for RUB 4.5 billion, with the transaction scheduled to be completed in January 2019. Following the transaction, Sistema’s stake in RTI will reach 87 percent. The Federal Anti-Monopoly Service approved the share purchase in November 2016.
“VTB is looking forward to further developing its longstanding partnership with RTI Group and is ready to provide the whole spectrum of financial products and services to the company, as well as international expertise to help RTI efficiently expand its business operations,” First Deputy President and Chairman of VTB Bank Yuri Soloviev said.
“Sistema has a longstanding track record of cooperation with VTB Bank and the deal regarding RTI Group has strategic significance. Streamlining the debt portfolio will boost RTI’s financial stability and further strengthen its positions across key business segments,” Sistema President and Chief Executive Officer Mikhail Shamolin said.“Securing long-term financing from a lender such as VTB Bank signals the success of RTI Group’s strategy in the high-technology industry. Working with VTB, we will have more funding opportunities, which will help us deliver on our plan to expand our project portfolio and win market share, as well as sustain RTI’s steady growth,” RTI’s Chairman of the Board of Director’s Sergey Boev pointed out.
Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high-technology, banking, retail, timber processing, agriculture, real estate, pharmaceuticals, tourism and healthcare services. The company was founded in 1993. Its revenue in 2015 reached RUB 708.6 billion; its total assets equalled RUB 1.3 trillion as of 31 December 2015.