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2012.05.21 | Officially official: Belaruskali to pay off Sberbank’s $1bn ahead of schedule because of extortionate rates

“The terms of the credit agreement were more or less acceptable during the first six month. However, in the second half of the year the rates go up progressively. Consequently, if you are okay moneywise, you are free to pay back the loan ahead of schedule, and that option is stipulated in the credit agreement. This is what we are going to do,” Semashko said.

Asked about the source of finance to pay off the debt, the vice premier reminded that Belaruskali is a high-profit company, which earned $3.2 billion in potash fertilizer trade in 2011. Moreover, Belarus had been doing well financially recently, posting a $1.2 billion foreign trade surplus in 2011, Semashko said. “If we are doing fairly well financially, why should we take out expensive loans?” the vice premier said.

At the same time, Semashko does not rule out the chance that after paying off the $1bn loan to Russia, Belaruskali may apply for a new loan on more acceptable terms.

Russia’s Sberbank and the Eurasian Development Bank (EDB) signed a $1bn syndicated loan agreement with Belarus’ potash producer Belaruskali. The one-year deal was signed in Minsk on November 18, with Sberbank acting as the organizer and the agent for the syndicated loan.

Sberbank provided $900 million of the total amount and the remaining $100 million was allocated by the Eurasian Development Bank. Belarus’ government transferred U.S. $800 million from the $1 bn syndicated loan provided to Belaruskali by Russia’s Sberbank and the Eurasian Development Bank to the country’s foreign exchange and gold reserves.

PRIME-TASS