OMZ could lose 2 bln rubles on cancellation of Bulgarian nuclear plant project
MOSCOW. April 10 (Interfax) - United Heavy Machinery (OMZ) could suffer 2.152 billion rubles in losses due to the cancellation of Bulgarian nuclear plant project.
Gazprombank , OMZ's controlling shareholder, said in its financial statement that OMZ has a number of contracts with the Russian general contractor for the construction of a nuclear power plant in Eastern Europe. The bank's management believes these contracts could be cancelled by the general contractor due to changes in the agreements with the customer. "If these contracts are cancelled, OMZ could suffer a loss of up to 2.152 billion rubles," the statement said.
Russia's Atomstroyexport, a division of Russian state nuclear corporation Rosatom, signed an agreement with Bulgaria's National Electric Company to build a nuclear power plant in Belene with two reactors with a combined capacity of over 2,000 MW. However, the general contract to build the plant was never signed and construction never began.
In late March this year, the Bulgarian government decided to scrap the project. The Russian party said that Russian companies had already manufactured the first set of equipment for the NPP and a reactor for the plant had been assembled.
OMZ includes Izhora Works, which currently has a monopoly on the reactor equipment market; Skoda JS (engineering and equipment for nuclear power); and OMZ Spetsstal, a producer of special steels with capacity to make steel for the nuclear power sector.
OMZ manufactures, installs and services equipment for the nuclear power, oil and gas, and mining industries, and produces special steels. The company's production facilities are located in Russia and the Czech Republic.
