Daily Insight-In the spotlight: Prominvestbank and Naftogaz of Ukraine

According to the Ministry of Economy, Prominvestbank (B2 by Moody\'s), which is 93.8% owned by Russia\'s state financial corporation VEB (Baa1/BBB/BBB), is to extend a UAH340m loan to state-owned corporation Coal of Ukraine, which operates a number of coal mines in the Donbas and Carpathian coal basins. The state-owned company produces both thermal and metallurgic coal, and among its customers are state-owned thermal power generation companies and steel-makers including Arcelor Mittal and Metinvest. The government indicated last year an intention to privatise the remaining assets in the coal mining sector, and this state-owned company is the apparent prime candidate for privatization. The short-term loan duration spans until November 2011; Prominvestbank is charging a 23% annual interest rate for the loan.