denotes premium content | Jan 6 2009 Trade & Forfaiting Review magazine archive
Volume 9 Issue 1
On 22 September 2005, former Yukos CEO Mikhail Khodorkovsky had his appeal against convictions for tax evasion and fraud quashed. A day later, the jailed oil tycoon’s Canadian defence lawyer, Robert Amsterdam, was ordered to leave the country when a group of Russian ‘officials’ visited his Moscow hotel room in the early hours of Friday 23 September.
Amsterdam’s passport was confiscated. It was returned a few hours later with the visa revoked and he was given 24 hours to leave the country or face arrest. The ousting came just hours after Khodorkovsky’s appeal was dismissed ending the oil magnate’s bid to run for the State Duma in a December by-election. A clear and repeat message from Russian president Vladimir Putin, some would say, that Khodorkovsky should end his political ambitions.
But what effect is this having on foreign investment in the country? In our cover story, US correspondent Erika Morphy speaks to leading players about the Yukos legacy and its impact on the Russian market (‘Beyond the Bubble Mentality’, page 30). The article also looks at trade and project finance in the country and examines the types of transactions being financed. Meanwhile, European and Asian banks eager to tap the country’s vast natural resources are fuelling market activity.
Elsewhere, Trade & Forfaiting Review (TFR) has an exclusive feature on the specialty trade-finance companies that are exploring the idea of becoming hedge funds (‘Covert Operations’, page 40). According to Shezad Syed, head of manager selection for Axiom Alternative Fund, which is advised by Habibsons Bank, trade-finance companies are increasingly looking at hedge funds as alternative funding vehicles. Syed says such moves are being initiated in response to a shift by banks away from small and medium-sized deals, and the advent of Basel II.
I hope you enjoy this issue. As always, if you have any comments or suggestions, or would like to contribute to a future issue of TFR, please contact me on mmartensen@ark-group.com.
Michele Martensen, editor
Features
Covert Operations
When executives from a Brazilian producer of beef and leather products learned they had landed export mandates from companies in the United States and Japan, they were equally dismayed and overjoyed. The good news? The sales would be quite large as the buyers were investment grade companies in huge markets. The bad news? The sales would be quite large as the buyers were investment grade companies in huge markets. Erika Morphy reports.
Trade Tools
The tug of war between cash flow and lower costs of goods is nearing its end, writes Richard Lightbound, vice-president for TradeCard in Europe.
Adapting to the Market
When asked to describe one unique or innovative transaction that London Forfaiting Company (LFC) brought to market, Simon Lay, global head of forfaiting & trading obliged sevenfold. "Over the past twelve months we have arranged back-to-back LC facilities, syndication of corporate risks, US Exim-backed loan facilities, Islamic financing structures, trading of distressed debts, structured trade facilities against book receivables as well as trading across a vast geographic array of country risks in Africa, East Europe, South America and Asia." Amanda Greene reports.
Vive La France
Traditionally strong in trade and commodity finance, French trade banks remain a formidable force in the marketplace. Here, Erika Morphy talks to key players about current trends.
Russia: Beyond the Bubble Mentality
When he first moved to Moscow in 1992, Eric Michailov, a partner with White & Case, found it amusing when his counterpart across the negotiating table would defend a particular point by referencing the 'market' and how it operates. "At that time, the 'market' was maybe made up of a handful of deals," he says jokingly. "And in fact the market – if you could call it that – was opaque and quite limited." Erika Morphy reports.
Pushing Forward
Amanda Greene chats to Jeffrey Miller, senior vice-president and head of export finance at US Ex-Im Bank, about local currency financing, structured project finance and supporting new markets.
Regulars
Emerging-market debt pricing
At the end of September, Zimbabwe made another surprise repayment to the IMF. This repayment of $15m followed a surprise repayment of $120m a month earlier.
60-Second Interview: Tav Morgan
An American-Iranian by birth who learnt to speak Russian fluently, Tav Morgan has been deputy general director of Russian metals group Norilsk Nickel for one and half years, having worked for McKinsey & Company’s Moscow Office for nine years prior to joining Norilsk. Trade & Forfaiting Review spoke with him about the company's phenomenal run over the past few years.
Letter from Hong Kong: David Sullivan
In Hong Kong we have been enjoying the court case of a housewife who bludgeoned her top merchant banker husband to death with a heavy metal ornament. She actually rolled this guy up in a carpet and put him in the cupboard for a few days. She then said that she phoned his mobile to make sure he didn’t answer!
Market View: Lars Kolte
Everybody supports development, no-one likes change. In the private market the key mechanism is competition, which requires constant development and innovation. Hence, companies in a competitive environment have to change methods, organisation, focus and products all the time. We also know that companies with little or no competitive pressure tend to grow rigid in their ways and become extremely vulnerable to future competition.
