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SBD Global/February 5, 2014/Olympics

Russian Government Decrees That Sochi Investors Won't Have To Pay Loans Until '15

Russia's state-run bank Vnesheconombank is to give an extension to investors at Sochi Olympics venues. RIA Novosti quoted Deputy PM Dmitry Kozak, who is in charge of the Sochi Olympics, as saying that Sochi investors will not have to make any credit payments until the fall of '15. Kozak said, "Let's see what revenues will be generated [from the Olympics] and in the fall of 2015 we'll make decisions.” The move comes in response to long-time complaints from Sochi investors, including Basic Element, Gazprom, Sberbank, Interros and other major corporations, that the Olympic venues are potentially loss-making and the government should extend privileges to the investors to keep them from incurring losses.

NOT FAR ENOUGH: The investors welcomed the decision, but said that the measure is not going to be sufficient. A Basic Elements spokesperson told SBD Global, “As investors, we are interested in restructuring of Vnesheconombank loans and welcome the extension of the repayment date to late 2015. However, we believe that just extensions on loan repayments are not sufficient. In addition to that, a program of subsidizing interest rates on all Vnesheconombank loans over the entire loan period should be adopted.” He added that tax privileges on the operation of Olympic venues should also be introduced. Vnesheconombank extended 241 billion rubles ($6.8B) in loans to Sochi investors. In addition to sports venues, huge investments were made in the transport and hotel infrastructure.
Vladimir Kozlov is a writer in Moscow.
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