Russia's Promsvyazbank is to double a loan agreement originally signed with Commerzbank and Euler Hermes in 2004. The loan was initially set at €
25mn before it was increased to €
50mn in May 2006. It has now been increased to €
100mn.
Under the terms of the agreement, Promsvyazbank is able to draw down credit resources guaranteed by German insurer Euler Hermes to provide medium and long-term financing for its clients to use for the purchase of industrial equipment and services from Germany.
Commerzbank is also a minority shareholder in the Russian bank, with a 15.32% share in the bank's capital.
"The increase in the contractual amount of the loan agreement with Commerzbank will enable Promsvyazbank to augment financing for its clients, and therefore support a positive trend in co-operation between Russia and Germany in the fields of commerce and economy,” notes Alexey Fedotkin, vice-president and head of international finance at the Russian bank.
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