News from Finland in English

Finnvera to guarantee a 150 Million Euro loan for Russian teleoperator Megafon

Finnvera, a credit agency owned by the State of Finland, has agreed to guarantee a loan of some 150 Million Euros for the Russian teleoperator Megafon. The lender is the Italian bank UniCredit. The agency agreed to guarantee loans for purchase of telecomms equipment from the Finnish company Nokia. It has done so before in 2008, 2011 and 2014.

Due to recent developments in the Russian economy and politics Megafon and other Russian companies need to pay higher rate of interest than in the past. While Megafon is not on the West's sanctions list officially, it is still affected by the rising prices of financing as a result of the crisis in Ukraine.

Despite this raise in interests, expert believe financing from a Western bank still comes at better financial terms than that provided by local banks in Russia.

MegaFon is MTS and Vimpelcom in addition to one of the three major mobile operator in Russia. Megafon's main shareholders are the oligarch Alisher Usmanov (56.32%) and the Nordic TeliaSonera (25.17%). The market value of Megafon has about 10 billion dollars.

Recently, Russia's three major operator's performance has been sluggish and stock prices of companies are decreasing. The utilization of new Western technology companies will be expensive, because the income in rubles and the value of the ruble has been devalued significantly during the year against the euro and the US dollar.

Finnvera is a specialised financing company owned by the State of Finland. It provides its clients with loans, guarantees, venture capital investments and export credit guarantees. Finnvera is the official Export Credit Agency (ECA) of Finland.

Written by Janita on Thursday July 16, 2015
Permalink - Tags: business, economy, nokia, finnvera, russia, finland

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