Recent legal & business developments in Belarus, July 2010
1. German company Enertrag AG and Minsk Regional Executive committee in early July executed an investment agreement concerning construction of a wind power plant in Dzherzhinsk area. Energtrag AG intends to invest around 360 mio. EUR in the project. The steadily construction is to be launched in 2010 and completed by 2012. Plant’s capacity is estimated up to 160 MWt. Enertrag AG is a renown alternative energy sector producer and operates more than 400 wind power plant units worldwide.
2. Republican Unitary Enterprise «Belaruskaliy» was enrolled on the list of state enterprises to be privatized in 2010. It is reported that one of the shareholders of Russian «Uralkaliy» - Suleiman Kerimov – visited Belarus to hold negotiations regarding purchase of «Belaruskaliy» controlling with Belarusian president Alexander Lukashenko. Despite wide speculation in the media, press officer of Belarusian president did not confirm the meeting took place. Currently «Belaruskaliy» and «Uralkaliy» sell their products through a joint venture - «Belarus potash company». According to Russian media if Kerimov succeeds in acquiring of shareholding in «Belaruskaliy» and in Russian «Silvinit» he is likely to create the world’s largest potash fertilizing manufacturing group. Previously Belarusian authorities estimated «Belaruskaliy» capitalization to be in the range of USD 20-30 billions.
Lithuanian company Vakaru Miadenos Groupe in cooperation with Swedish company IKEA are planning to build woodworking plant that will produce chipboards, laminating boards with approximate amount of investments – 100 mln USD. Investors are planning to locate the production in Free Economic Zone “Mogilev”.
3. Process of search of a investor for the third-largest state bank of Belarus - JSC “Belinvestbank” is on the way – claimed Chairman of the National Bank Piotr Prokopovicth during a media briefing.
“However what we need is not just an investor, but a strategic investor who would invest billions of Euro in our economy. It must be someone of the world’s 20 largest banks”. Mr. Prokopovitch also mentioned another distinctive feature of “Belinvestbank’s” potential investor: “It should be a EU investor. We have two main trade partners – Russia and the EU, but we already have 10 Russian banks and just 2 banks from the EU”.
4. In late July Belarus issued its debut Eurobonds for USD 600 mio. The bonds were rated B+ by S&P and sold at 8,75% annual rate / 99% par value to European investors. Debut issue was organized by BNP Paribas, Deutsche Bank, Royal Bank of Scotland and Russian Sberbank. First issue of Eurobonds is a definite breakthrough for Belarus in terms of diversification of borrowing sources. It is planned to issue Eurobonds also in Russia later this year and then in Asia. Earlier President of Belarus approved issue of Eurobonds for 2 USD billions during 2010-2011 by a special Edict.
