Vladimir Putin’s son-in-law boosted by $1.75 bn state loan
MOSCOW: The son-in-law of Vladimir Putin stands to benefit from $1.75 billion in cheap finance from the Russian state, an examination of public documents shows.
The money will help fund a petrochemical project at a company in which Kirill Shamalov (pictured), 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 per cent.
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 per cent interest for such a loan.
Irina Alizarovskaya, an analyst with Raiffeisenbank called the financing “quite cheap.”
Shamalov did not respond to a request for comment.
In a statement by Sibur on December 9, Dmitry Konov, its chief executive, described the state finance as having “favourable terms.” A Sibur spokesman said the company had no information “about family relations or relations between the company’s shareholders and the president of Russia.” The state loan, he said, “underwent all necessary procedures and was approved in strict accordance with the laws.”
The country’s National Wealth Fund, which was valued at the start of 2015 at 4.8 trillion roubles (then $72 billion), typically invests in national infrastructure projects such as railways, nuclear technology and major roads.
Prime Minister Dmitry Medvedev issued a decree in October to add the petrochemical plant to the list of projects in which the fund can invest.
The decision, Medvedev said, would reduce “dependence on imports” and create up to 15,000 jobs.
The state money forms part of the overall $9.5 billion cost of Sibur’s Siberian project, which is known as ZapSibNeftekhim, or ZapSib.
Sibur has said in public announcements that the plant will be the “largest modern petrochemical facility” and create a world-class facility for making chemical products from Siberian gas supplies.— Reuters