RusHydro and VTB Bank signed an agreement to improve terms of the long-term forward contract
November 21, 2019. Moscow, Russia. PJSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces signing a supplementary agreement with VTB Bank to improve the terms of the forward agreement signed in March 2017.
George Rizhinashvili, member of the Management Board, Deputy General Director of RusHydro, and Yuri Soloviev, First Deputy President and Chairman of VTB Bank Management Board, signed an agreement at the 11th Annual VTB Capital Investment Forum ‘Russia Calling’ that updates the terms of the forward agreement initially signed in March 2017.
Earlier in October 2019, the Board of Directors approved the supplemental agreement to the forward contract. RusHydro and VTB Bank signed the agreement of intent in September 2019 at the Fifth Eastern Economic Forum.
The forward contract is a unique mechanism that allowed RusHydro to raise funds at a significantly lower rate as compared to conventional bank loans.
The supplemental agreement provides for lowering the forward rate by 50 bps (initially set at CBR key rate + 150 bps) and extension of the agreement for three years through 2025 allowing more time to seek a strategic investor and jointly work on increasing RusHydro’s share price.
RusHydro and VTB Bank have been initially signed the forward contract in order to refinance RAO ES East subgroup’s debt. The deal has helped raise funds for the strategically important power sector of the Far East and helped reduce RusHydro Group’s consolidated debt. The transaction has not only improved the financial position of the Group’s far-eastern subsidiaries but also paved the road for amendment of the company’s dividend policy.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
Shares / ADR