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Russia's PIK says secures upto $300 mln state loan

Published 11/25/2008, 08:15 AM
Updated 11/25/2008, 08:18 AM

MOSCOW, Nov 25 (Reuters) - Russia's PIK Group said on Tuesday it had secured a loan of up to $300 million from the state lender VEB as part of the government rescue plan aimed at helping real estate companies to refinance their foreign debts.

"As far as we know, a decision in principle has been made (by VEB) to provide a loan of $250-300 million to PIK," said Natalia Konovalova, the spokeswoman of PIK Group.

She did not give the terms of the loan. VEB lends at a minimum of the LIBOR interbank lending rate plus 5 percent, while its board may set additional conditions.

PIK, the leading residential property developer in Russia, has to repay $900 million of debt before the end of 2008.

Chief Financial Officer Evgeny Luneev had said the company would channel $400 million of its own funds to the debt repayment, and seek to raise the remainder from financial institutions.

In October, the company also won several contracts from the City of Moscow totalling $1 billion under which Moscow planned to buy 323,000 square metres of PIK's residential buildings at $2,900-$3,400 per square metre.

But the deal may fail, as Moscow has demanded that PIK sell it the buildings at a lower price. PIK says it is currently talking to the government about the terms of the contracts. (Reporting by Yulia Komleva; Writing by Maria Kiselyova; Editing by Rupert Winchester)

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