Russian Forest Products will receive at least $193 million in a deal that will allow it to produce products of greater added value than the logs it now exports mainly to China. Source: The Moscow Times
Russian Forest Products is the target company that will receive the injection of funds from the Russia-China Investment Fund, marking the first investment by the joint sovereign fund.
Details of the deal involving Russia’s second-largest logging company will be released in a statement by the fund at the Asia-Pacific Economic Cooperation forum in Vladivostok later this week.
The fund is to announce that it reached a tentative agreement to buy equity in Russian Forest Products in a deal that will allow the logging company to produce plywood and other products of greater added value than the logs it now exports chiefly to China.
The fund would become the largest single shareholder in the Far Eastern company.
Russian Forest Products accounts for 10% of the country’s total timber exports to China.
The fund is a joint venture between the state-backed Russian Direct Investment Fund, or RDIF, and China Investment Corporation that was announced in October of last year.
The partners agree to each contribute to the joint fund and raise further funds from outside investors.
RDIF general director Kirill Dmitriev said that the fund was discussing a number of projects, including one with a Malaysian fund concerning the pulp industry, and one with an Australian fund concerning airport infrastructure.
