| LONDON, March 21
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
Gunvor was preparing to launch a $665 million dual-currency
loan refinancing and Sibur was seeking a five-year loan of up to
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
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
Talks on all other Russian loans in process have ground to a
halt, bankers said.
(Editing by Tessa Walsh and Jane Merriman)