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ALROSA

February 5, 2004

Canada's EDC opens credit line to ALROSA

ALROSA is the first Russian company to have signed a credit agreement with Export Development Canada ( EDC ), Canada's state export credit agency, to finance ALROSA's imports of Canadian-made mining machinery and transport management equipment.

Under the agreement signed in December 2003 EDC is to extend a U.S. $15 million credit line to ALROSA for five years. It is essential that unsecured financing and guarantees will be provided under a corporate risk of ALROSA. This is the first ever agreement between a Russian company and EDC.

For a few years ALROSA has been importing Canadian equipment adapted for the Arctic conditions. The first talks between ALROSA and EDC took place in July 2001, when EDC expressed its intention to promote the expansion of co-operation between ALROSA and Canadian exporters. Later in February 2002 in the framework of the visit to Russia of a delegation of Canadian political and business leaders (the so-called Canada Team) headed by Prime Minister Jean Chretien the companies signed a memorandum of understanding on financing ALROSA's purchases of Canadian equipment on better terms than any other export agency was able to provide.

According to ALROSA's Vice President Dmitry Novikov, ‘EDC's credit line will cost less for Alrosa compared to the company's other borrowings’. Thus, the credit line will not only serve to secure necessary supplies of Canadian equipment on preferential terms, but also continue the company’s policy aimed at reducing its short-term and expensive debts.

For your reference:
Export Development Canada (EDC)is a state financial institution established in 1944 and devoted exclusively to providing trade finance services to support Canadian exporters and investors. EDC's financial services include credit insurance, bonding and guarantees, political risk insurance, direct loans to buyers and lines of credit in other countries.

ALROSA Co. Ltd.is one of the world’s major rough diamond producers accounting for some 25% of the total world diamond output. In 2003 the company produced $ 1610.3 m worth of diamonds. Its diamond sales in 2003 amounted to $ 1814 m, including $ 122.4 m from polished diamond sales. The company’s production target for 2004 is $ 1856 m. ALROSA’s major shareholders are the Russian Ministry of State Property (37%) and the Yakutian Ministry for the Management of State Property (32%).

Media Contact:
Yuri Beskakotov
ALROSA Media Service
E-mail: ymb@alrosa.ru 
Tel/fax: 956-95-51

 

 

 

 

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