DAVOS-UPDATE 1-Russia firms bid $90bln for foreign debt help-VEB

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DAVOS, Switzerland, Jan 29 (Reuters) - Russian companies have made bids for about $90 billion in help from state corporation VEB to restructure foreign debts, VEB chairman Vladimir Dmitriev told reporters on Thursday.

“We received a total of $90 billion in bids,” Dmitriev told reporters on the sidelines of the World Economic Forum in Davos.

VEB is entrusted with distributing $50 billion of state money to help Russian companies refinance their foreign debts. About $11 billion of that has been distributed.

But the size of the bids gives an indication of the seriousness of the economic crisis facing Russia, whose economy is forecast by the government to contract in 2009 for the first time in more than a decade.

Russian corporates have to pay back $115.7 billion in foreign debt and interest this year, according to Russian government estimates.

Slumping demand for those exports have undermined the economy, raised fears about political stability and hammered Russian stocks, bonds and the rouble RUB=.

Some of Russia’s richest men, who borrowed billions of dollars in the boom years under former President Vladimir Putin, have been badly hit by the economic crisis as the value of collateral they put up as security for major loans plummeted.

Many have turned to the state for help, though First Deputy Prime Minister Igor Shuvalov told reporters on Thursday that the state would not write a blank cheque for top businessmen.

VEB which helps decide which businesses survive has become one of the most powerful entities in Russia. Prime Minister Vladimir Putin heads VEB’s supervisory board and the corporation is state owned.

Yields on some Russian corporate Eurobonds soared to near default levels late last year as investors dumped Russian debt amid concerns about the resource based economy.

International debt markets are still closed to most Russian companies and the local rouble debt market is way too shallow for the size of refinancing needed by many corporates.

The fall of the rouble against major currencies has also put pressure on corporate borrowers who have rouble incomes but foreign currency debts.

"Frankly speaking, this year it will be very difficult for Russian companies to find funding abroad, with the exception of major companies who have a state guarantee, or some of the oil companies," the CEO of VTB VTBR.MM, Russia's second largest bank told Reuters Television on Thursday. (Editing by Mike Peacock)