EBRD and the Company are negotiating the $75 mln loan.

Experts of the European Bank for Reconstruction and Development (EBRD) are now working at Uralkali Company. Their visit is connected with an agreement to be signed between the bank and the company for provision to the company of a loan in the amount of $75 million for seven years. Uralkali plans to use this money for upgrading of the production, renovation of rolling stock, introduction of energy conservation technologies. At present, Uralkali and EBRD are negotiating the main parameters of the loan, how the loan is to be collaterized and repaid.

The negotiating process consists of several stages: evaluation of the whole company, evaluation of the borrower's possibilities, due diligence review, terms on which the loan is to be granted, drafting of a loan agreement and its approval by the Board of Directors of the bank.

"For any company borrowing is an effective means of development," says Artur Markaryan, Director for Economics and Finances of Uralkali. "The only question is where the money is to be invested, what is to be developed. It is impossible to invest in everything at once. Therefore we have determined the most urgent problems of the company, which have to be dealt with in the first place. When a company understands that it is going to remain steadily profitable for may years ahead it may calculate this profitability, obtain a loan and then repay the loan using this profitability. The effect of a financial lever is the most correct, most efficient decision for any company. We have chosen EBRD because it provides the longest and cheapest loans. EBRD differs from commercial banks in that it can extend loans for a long period without special standby arrangements."

For EBRD the main criteria for evaluation of a borrower are as follows: the presence of a clear-cut development strategy; financial accounting based on international standards; adequate management. Another important condition set by the bank is that the company must have an ecological certificate. Recall that in late 2002 Uralkali was the first company in Berezniki that received Russia's Certificate of the Environmental System Management. Before the end of this year Uralkali plans to receive an international certificate of compliance with the requirements of International Standard ISO 14001.

At present, 27 countries - from Central Europe to Middle Asia, use the investment tools of EBRD - the largest investor in the region. Apart from lending its own funds the bank attracts large foreign direct investments. The bank owners include 60 countries and two international organizations. Although shareholders of the bank are state representatives, it invests money mostly in private enterprises. The bank is also actively engaged in various infrastructural projects.