Friday, January 01, 2016

Happy New Year, Russia: Putin's Son-in-law Gets Very Cheap $1.75 Billion Loan From Gov

The son-in-law of Vladimir Putin stands to benefit from $1.75 billion in cheap finance from the Russian state, a Reuters examination of public documents shows. The money will help fund a petrochemical project at a company in which Kirill Shamalov, husband of Katerina Tikhonova, the Russian president's younger daughter, has a significant interest.

Shamalov is a major shareholder in Sibur, Russia's largest processor of petrochemicals. This month Sibur obtained $1.75 billion from Russia's National Wealth Fund to help build a huge new plant in Tobolsk, Siberia.

According to corporate documents, Sibur was able to borrow the money at a current interest rate of 2 percent. That is a bargain, according to financial analysts. Artyom Usmanov, an analyst at investment firm BCS, said borrowers on the Russian bond market would expect to pay over 7 percent interest for such a loan. Irina Alizarovskaya, an analyst with Raiffeisenbank called the financing "quite cheap."

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