State Oil Fund Saves AZN 14 Million by Investing in Bonds Mercury Investments and Holdings Ltd

In 2014 the State Oil Fund (SOFAR) saved AZN 14 million over three years (2012-2014) on investments for the purchase of bonds of the company Mercury Investments and Holdings Ltd. This is stated in the annual report of the Fund.

The company is a 100% subsidiary of SOCAR and was established in the offshore.

According to reports by SOFAR, on 26 September, 2012 the Fund acquired $ 200 million bonds of the company attracted by the project of construction of the Baku Shipyard. The yield on these securities is 6-month USD LIBOR + 1.335%. These bonds are subject to redemption at the expiration of 15 years after their purchase.

In 2013 (18 July and 18 November) the Fund invested $250 million and $70 million in the bonds of the company. In the past year (28 February) SOFAR invested another $ 69 492 000 in the purchase of bonds. All of these securities were issued for 1 year under 2%. Neither SOFAR nor SOCAR reported under which project the funds were involved.

While at the end of 2013 the total investment in bonds of Mercury Investments and Holdings Ltd by SOFAR was estimated at 413 million 565 thousand manats, up to 31 December 2014, this amount was reduced to 211 million 480 thousand manats.

Recall that the construction of the Baku Shipyard in 2010-2013 cost its founders (SOCAR - 65%, Keppel Offshore Marine, Singapore - 10%, Azerbaijan Investment Company - 25%) $ 470 million. Of these, $ 160 million is investment by the founders of LLC Baku Shipyard in the capital of the company, while the remaining $ 310 million is debt capital. -----08B