OUR SPECIALIZATION

Any business at a certain stage of its lifecycle (establishment or another qualitative evolution swing) comes across the need for external financing. Belarusian organizations are mostly used to taking loans from domestic banks secured with real estate and other fixed assets. Much less often they would offer a floating pledge or security interest over assets.

However, practice shows that loaning from Belarusian banks does not allow to fully apply non-conventional collateral forms (stock/share pledge, integral asset mortgage, etc.). Moreover such loans are quite expensive.

In terms of implementation of major “green field” investment projects (from scratch), collateral objects would usually emerge at the end of the investment project.

In such circumstances Belarusian business is advised to look at ‘project financing’.

Today, banks and other financial institutions of all developed countries, as well as individual international financial organizations, such as the European Bank for Reconstruction and Development (EBRR), Eurasian Development Bank (EDB) and International Finance Corporation (IFC) operate within project financing framework.

Project financing is generally aimed at contributions into long-term investment projects, while the cash flows generated by the project as such in future make the key source for loan/credit servicing, and the debt is secured with assets developed and used under the project (project site, buildings and structures, equipment).

Meanwhile, capital borrowed from international financial organizations is much cheaper than from Belarusian banks, starting from 4.5% APR.

It should though be mentioned that raising IFO funds may entail a number of issues for the Belarusian borrower, which can be easier and more cost-effectively addressed by a team of lawyers who have dealt with similar issues and have expertise in current standards and practices in this area.

Based on our accumulated practical experience we may actually assist our clients by:

• developing and presenting a third-party legal opinion, i.e., a qualified legal opinion on due registration and status of the Belarusian organization, as well as compliance with all corporate procedures required for signing the transaction;
• reviewing loan/credit agreements that are generally governed by a foreign (often English) law in terms of compliance with mandatory/peremptory norms of the Belarusian law. At the same time, we provide assistance with applying concepts that are not typical of the Belarusian law, applying them to domestic legal environment; we also explain the essence of the suggested transaction to the client in an intelligible form;
• developing the documentation package required for getting a permit from the Belarus National Bank (when the capital flow associated transaction requires the National Bank’s permit);
• providing advisory support at the negotiations phase while selecting the best available transaction security methods based on existing assets and legal titles;
• at the execution stage, following up on notarization and/or transaction registration/security processes.

Our lawyers have experience with working as for both project financing and borrowing parties. This helps us to adequately judge and make an unbiased appraisal of the conditions offered by parties, which makes a great foundation for fruitful negotiations on financing terms and conditions.

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