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Sunday, February 01, 2009

The finer points of credit

The finer points of credit

Urm2 One of the documents signed in Moscow this week by Russian and
Cuban negotiators is a "general agreement on interaction" between the
automotive company Kamaz and the Cuban firm Tradex, that -- according to
Kamaz's deputy director Akhat Urmanov -- would enable Cuba to buy on
credit as many as 500 Kamaz trucks in 2009 and perhaps twice as many in
subsequent years.
However, Kamaz this week suspended its production for the third time
since November because the worldwide economic crisis has frozen the
demand for trucks. During this idle period, the company hopes to clear
its stockpile of unsold trucks, a Kamaz spokesman told the Reuters news
agency.
The way I read this, by selling its trucks to Cuba under the terms of
the $335-million credit line granted by Moscow to Havana, Kamaz is in
effect being bailed out by the Russian government. It clears its
stockpile, collects its money from Moscow, and everybody is happy --
assuming that Havana will eventually repay Moscow. See our Nov. 7 blog
item "Sechin's back; Russia OKs $335M credit." Ram2 [PHOTO SHOWS: Raúl
Castro introducing Dmitri Medvedev to Communications Minister Ramiro
Valdés on Friday. At left is top Cuban negotiator Ricardo Cabrisas Ruiz.]
---Renato Pérez Pizarro.

http://miamiherald.typepad.com/cuban_colada/2009/01/the-finer-points-of-credit.html

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