VTB Group, Russia's second-biggest bank, may lend X5 Retail Group NV and other local food retailers a total of 18 billion rubles ($665 million) to help the companies refinance debts.
All leading grocers have made loan requests, the state-run bank said today in a statement. The average annual interest rate will be about 18 percent based on preliminary indications, VTB said. OAO Magnit, Russia's second-largest food retailer, said separately it has received the first installment of 2.5 billion rubles in borrowings from the lender.
The loans are part of a package worth more than $200 billion assembled by the government in an effort to relieve the country's worst financial crisis in a decade. Moscow-based X5's stock has plunged by more than half this month as the world credit crunch forced the grocer to cut its sales-growth forecast and sparked concern about access to cash.
``The rate is high, but no one is giving loans at a lower rate anyway,'' Anna Kochkina, an analyst at UniCredit SpA in Moscow, said of VTB's plan. ``So it's still positive.''
Magnit said in an e-mailed statement it has received 300 million rubles as part of a VTB loan. Smaller rival OAO Seventh Continent received initial funding from a state-controlled lender, First Deputy Prime Minister Igor Shuvalov said Oct. 27. He didn't name the banks or say how much they might lend to food retailers in total.
The government allocated $50 billion to state development bank Vnesheconombank, or VEB, as part of the package. Companies can apply for loans of between $100 million and $2.5 billion, VEB President Vladimir Dmitriev said Oct. 13.
Vlada Baranova, a spokeswoman at Seventh Continent, declined to comment by telephone. Anna Kareva, head of investor relations at X5, said the company and state banks are in loan talks without elaborating. Irina Kibina, a spokeswoman at Sberbank, the country's biggest lender, said it has no intention of releasing its plans for lending to retailers.
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