Erste Group urges Putin to save Amurmetall
KHABAROVSK. Oct 2 (Interfax) - Erste Group AG, one of the creditors of OJSC Amurmetall, the only steelmaker in Russia's Far East, has sent a petition to President Vladimir Putin urging him to take steps to save this plant, group representative Christian Neuhold said at a meeting with Khabarovsk Territory regional government officials on Tuesday.
Neuhold said he had come to Khabarovsk especially to give the regional government a copy of the petition.
Erste Bank has been working with Amurmetall for more than 10 years and has provided the plant with a total of $70 million in financing, he said, adding that the bank still works well with the company, which ran into serious difficulties due to the global economic crisis of 2008. Erste believes the unprecedented package of measures for Amurmetall's support that was developed and introduced in 2009 and stabilized the situation at the plant deserves a great deal of respect, Neuhold said.
However, the recovery program Amurmetall was not sufficient and the plant went into bankruptcy proceedings several months ago. Erste is on the board of creditors and is trying to find a solution, however, it will be impossible to save the company without support from the authorities at the highest level, Neuhold said, adding that hopefully a solution will be found.
The deputy chairman of the Khabarovsk regional government and the region's development and foreign relations minister, Viktor Kalashnikov said the company's main problem is its debts.
"A working meeting was held today in the regional government at which specific measures of support for the plant were discussed. On the part of Khabarovsk Territory, a decision has been made to draft a bill to grant the plant exemptions on property tax during the recovery period. We believe that the plant must definitely be saved," Kalashnikov said.
He also noted that "in August 2012 Amurmetall showed an operating profit."
The situation at the plant has improved, but measures to save it would be more effective if it could be merged with a larger company, such as Uralvagonzavod, as talked about earlier, Neuhold said.
The company's net losses for January-July were 1.342 billion rubles, down 21% year-on-year.
The Khabarovsk territory's arbitration court of the Khabarovsk Territory put Amurmetall under supervision for 4.5 months on August 30. The metals plant, under the control of State Duma Deputy Alexander Shishkin, stopped operations in November 2008 at its bar rolling and plate rolling mills because of declining demand for production.
In June 2009, the court of the Khabarovsk Territory started up supervision procedures for Amurmetall. The company, at the end of 2009, signed an amicable settlement with creditors, who included Sberbank , VTB , Gazprombank , Commerzbank, Erste Bank and Nordbank, among others.
VEB acquired 100% in Amurmetall Holding in April 2010 and thereby gained control of the following enterprises: LLC Amurmetall Group, LLC Siberia-Amur Metal, OJSC Amurmetall, LLC Siberia-Amur Steel, LLC Amurmetall Litye, LLC Amurmetallservis, LLC Amurmetall-Resource, LLC Amurmetall Trading, and LLC Sovgavan-Vtormet. The bank estimated the value of the asset consolidation on the date of the acquisition at 25.22 billion rubles. Liabilities came to 24.72 billion rubles. Amurmetall's former owners received rights to buy back shares from VEB.
Amurmetall's debt at the end of 2011 came to 26.5 billion rubles (5.3 billion rubles of which owed to VEB) with sales revenue at 14.5 billion rubles.
It was reported in May 2012 that Uralvagonzavod (UVZ) was interested in managing the enterprise. However, UVZ said in August that it was unable to agree on an appropriate timeframe for managing Amurmetall and now the plant "is ready to develop plans for future operations with Amurmetall only after bankruptcy procedures have been introduced."
