The British Government could have to repay more than £250m of loans used to finance export contracts to Russia in the engineering sector.
The Government’s export credit agency, ECGD, has guaranteed 16 dollar and sterling loans worth a total of £258m for contracts covering equipment for factories, mines and oil refineries since March 1995.
The largest single deal is a loans package worth £73m to pay for mining equipment supplied by Joy Mining Machinery of Nottingham.
The average term of these loans is seven years, and if any moratorium on debt repayments put them into default, the lending banks could claim repayment from ECGD.
An ECGD spokesman said the indications to date were that such sovereign debt would be exempt from the moratorium, but he added: ‘We’re watching the situation very carefully.’
The agency is also likely to increase its provisions against Russian loans.
The exposure of UK engineering companies to the Russian turmoil could be limited, according to the Engineering Employers’ Federation.
Graham Mackenzie, EEF director-general, said: ‘The level of engineering companies’ business in Russia will be quite small. Russia is not in the top 10 British export markets, and is probably not in the top 20.’