LONDON, March 21 The future of two big loans for oil trading firm Gunvor and petrochemicals group Sibur were thrown into doubt after Russian businessman Gennady Timchenko appeared on the US sanctions list over Russia's involvement in Crimea and Ukraine.
Timchenko is one of Gunvor's founders and was a major shareholder until he sold his stake to the firm's chief executive Torbjorn Tornqvist ahead of the sanctions. Timchenko is also a major shareholder in Sibur.
The United States on Thursday extended visa bans and asset freezes on some of Russian President Vladimir Putin's closest long-time political and business allies.
Timchenko, a major oil and commodities trader, appeared on the list of 20 names, which also included Kremlin banker Yuri Kovalchuk and his Bank Rossiya, as well as Putin's chief of staff and his deputy, the head of military intelligence and a railways chief.
Gunvor was preparing to launch a $665 million dual-currency loan refinancing and Sibur was seeking a five-year loan of up to $1 billion.
The sanctions were imposed just days after Gunvor told existing lenders of a schedule of roadshows for its new loan, which refinances an $850 million, dual-tranche loan that was signed in June 2013.
Some lenders say they are putting the deal on hold until the situation becomes clearer.
"Normally if the pricing is OK, we will maintain our commitment in the refinancing. But if there is any sanction involved, we may not be able to join," a lender, who participated in Gunvor's earlier loans, said.
Existing lenders on Gunvor's June 2013 loan which is being refinanced are mostly based in Singapore and Hong Kong.
"If the company is on the sanction list, we cannot deal with it any more. We have to follow the regulation from the Monetary Authority of Singapore (MAS)," a Singapore-based loans banker directly involved in the refinancing said.
In the years since 2007, the MAS has issued sanction regulations on North Korea, Libya, Somalia, Eritrea and Iran.
In Hong Kong, it is unclear if non-US banks have to comply with the US sanctions. In practice, the Hong Kong Monetary Authority requires all financial institutions under its supervision to screen their transactions against sanctions lists from both the United Nations and the Office of Foreign Assets Control, part of the U.S. Treasury which administers and enforces economic and trade sanctions.
Another Singapore-based senior loan banker and existing lender to Gunvor said the company will have to prove that it is no longer owned by the Russians and get off the sanctions list before banks will proceed.
"I think it (Gunvor) will have to do a presentation early next week and explain the situation," he said.
Gunvor's regional chief finance officer for Asia Pacific, Muriel Schwab, declined to comment.
The Swiss-based oil trading company had said on Thursday that Timchenko sold his stake in Gunvor to CEO Tornqvist on March 19, anticipating potential economic sanctions.
Gunvor Group has trading offices in Geneva, Singapore, Nassau and Dubai and representative offices around the world.
SIBUR IN TALKS
Before the sanctions, Sibur's loan of up to $1 billion was one of a handful of Russian loans in process that looked likely to go ahead.
The loan had been syndicated and was in documentation and was awaiting the green light to proceed.
But banks could be prohibited from lending to any companies where individuals identified in the sanctions list own a controlling stake.
Sibur's bankers are in talks with lawyers about whether Timchenko's 37.5 percent stake is a controlling stake, which will be based on the degree of day-to-day involvement that Timchenko has in the company, bankers said.
Timchenko bought the 37.5 percent stake in Sibur from Gazprombank in 2011.
Lenders are still working on Sibur's loan documentation but will not release the money until these questions are resolved, a senior London-based banker said.
"The Timchenko situation is certainly a twist. We are in watch and wait mode," a second banker close to the deal said.
Sibur declined to comment.
Russia's largest iron ore producer, Metalloinvest , managed to sign a $1.15 billion pre-export deal on Wednesday March 19 which was at a more advanced stage when the crisis struck.
Talks on all other Russian loans in process have ground to a halt, bankers said.