Russian Bank Issues First Loan to Foreign Alrosa Client for Rough Purchases

Rough Market
30/01/2020 16:28

In what could turn out to be a pivotal development in rough diamond financing for Alrosa's long-term clients, Antwerp-based international company Dali Diamond has signed a loan agreement with Eximbank of Russia (part of the Russian Export Center Group) for the financing of rough diamond purchases from Alrosa. Financing for the purchase of rough diamonds has been a major concern in recent years as several banks have reduced their exposure to the diamond market or withdrawn from it altogether. If it proves successful, this model could end up being a milestone. Dali Diamond already utilized the new loan funds for the first time during Alrosa's January trading session.

The loan agreement between Eximbank of Russia - a State-specialized Russian export-import development bank (JSC) providing credit and guarantee support to Russian suppliers of domestic goods and services - and Dali Diamond provides for a 24-month revolving credit line in euros. Alrosa says the terms of the financing "are among the best in the industry today – both with regard to rates and deferred payments to the bank." Exiar, a Russian agency for export credits and investments insurance, is in charge of risk insurance under the agreement. “It’s another milestone for Dali Diamond to receive a seal of confidence of the Eximbank of Russia in choosing Dali as their first client in diamonds”, noted Isidore Morsel, President of Dali Diamond Co. 

Nikita Gusakov, Senior Vice President of the REC Group, commented, “This transaction marked the beginning of cooperation between Eximbank of Russia and Exiar with the diamond industry and one of Alrosa’s long-term clients, the Belgian company Dali Diamonds. Undoubtedly, this transaction is a good foundation for further enhancing cooperation on projects related to export of diamond products to Alrosa, the undisputed international leader in the diamond industry." 

“We are happy that our long-term client Dali Diamonds had successful negotiations with the Eximbank of Russia and for the first time ever could finance the purchase of Alrosa’s goods within a revolving credit line. It is a new source of funds in our industry, and we hope that such form of cooperation will work out,” says Alrosa Deputy CEO Evgeny Agureev. “Now, when we often hear that sources of financing in the industry are cut down and key players have decided to withdraw from the sector or are considering such an option, the actual financing that took place is encouraging and is a milestone for the whole diamond market.”