hotel industry russia 2010 financing refinancing a. bourdin 2/12/10
TRANSCRIPT
HOTEL INDUSTRY RUSSIA 2010
FINANCING
REFINANCING
A. Bourdin 2/12/10
HOTEL INDUSTRY RUSSIA 2010
DOING NOTHING AND PAY OR TAKING 2 ASPIRINES AND START WORKING WITH BANKS
CRISIS ?
As Mr. Kudrin comment on the Russian Financial Forum“CRISIS is not over and 2011 will be a difficult year”
HOTEL INDUSTRY RUSSIA 2010
What about Today :
- 2010 was the end of the Crisis
- We can start to see some type of competition between Banks and opportunities in refinancing
- But things are not so easy as they used to be before Crisis
HOTEL INDUSTRY RUSSIA 2010
- RISK ANALYSIS is now the main topic
- No more “RATE ANALISYS” without “CREDIT ANALISYS”
Banking Sector Balance Sheets will shrink to avoid the TOO BIG TO SAVE
HOTEL INDUSTRY RUSSIA 2010
- the Banks announced 1 Trillion Rubles is the after Crisis consolidated bad debt amount
- PLEDGE & SECURITY should cover minimum 50% and up to 70% of your debt . It was 30% before Crisis
- Currency Risk (Hard Currencies or not ) ?
- Strong Market evolution for 2011 and 2012
HOTEL INDUSTRY RUSSIA 2010
OUR ADVANTAGE NOW:
- Banks are actually loosing Main Borrowers
- Banks expect a growth of 15% of the loan Portfolio next year
- New control of central banks regarding the risk
- Russian Bank are facing a problem of excess of liquidities
HOTEL INDUSTRY RUSSIA 2010
Start analyzing competitive advantages between Local Banks and European Banks
DUMPING of the market corporate Loans
HOTEL INDUSTRY RUSSIA 2010
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2006 2007 2008 2009 2010
Usd
Euro
Ruble
HOTEL INDUSTRY RUSSIA 2010
NEW BASEL III Rules
- Required a high Security level in the books of the Banks
- No Cuts on debts in Banking Books
- Strong Analysis of the System Risk
On what we have to
focus on:
- Avoid “ZOMBIE” Banks who promise large opportunities and request a lot of work for nothing. And where the main risk to Call Back Capital after few years
in case of Bankruptcy.
- Find a proper balance between the Risk and the Opportunity for each proposal
- Targeting the bank and insuring that the bank strategy reach your expectations
HOTEL INDUSTRY RUSSIA 2010
RUSSIAN or EUROPEAN BANKS:
- With Russian Banks the Restructuring term is too Short and does not allow any potential developments
- Interests rates are higher in the Russian Bank“If we consider than 40% of the bank profit is
generated by the interests rate
- Extra Judicial procedure clause
HOTEL INDUSTRY RUSSIA 2010
- Personal Guaranty ????? (What is behind this)
- Possibility to change Interests rates based on Market
- Loans in Rubles at fixed rate are considered as risky ones for the bank
- Possible devaluation of the Ruble ???????
HOTEL INDUSTRY RUSSIA 2010
- LIBOR is actually very LOW
- Now Western Banks are offering up to 30 years Loan in order to generate more revenues from long term
Investments
- Attract Funds from Russian Market covered by European Banks
- Placing Bond in Rubles
HOTEL INDUSTRY RUSSIA 2010
WHAT WE DID and DO in
KORSTON ?
HOTEL INDUSTRY RUSSIA 2010
OAO KORSTONA
Finance Consulting
Hospitality Retail
IT services Development
Security Services
KAZAN Moscow
HOTEL INDUSTRY RUSSIA 2010
- Our work is based on Corporate Policies
- Always analyzing the market, Local and European, to restructure our Credit Portfolio
- Always in Contact with the Banking Sector
HOTEL INDUSTRY RUSSIA 2010
-We are Long term Investor and not targeting Micro Credits and short term advantages
- Optimize our Credit Portfolio in order to decrease our Interest Cost and Optimize our Cash flow
- In 2010 we saved more than 60 MRubles on interests
HOTEL INDUSTRY RUSSIA 2010
OUR PLAN for 2011
- In 2009 we faced a double Crisis :1)Casino Closing2)Financial Crisis
- In 2010 we were able to restructure our complete Debt Portfolio and decrease interest rate to 5 points
- In 2011 we plan to work and optimize our Credit Portfolio and are actually talking with European and
Russian Banks
HOTEL INDUSTRY RUSSIA 2010
Actual Proposals received:
Russian Banks
Term : 7 to 10 years Interest Rate : 8 to 9%
European Banks
Term : Up to 15 years Interest Rate : 6 to 7%
HOTEL INDUSTRY RUSSIA 2010
OUR TARGET and STRATEGY :
-Refinance Complete Portfolio with Long Term Loan and Interest Rate between 3 to 5%
- Finance new projects in Region in partnership with Banks
- Develop our Private Equity System
- Placing Bonds and become Public Company