VEB starts taking bids for Tractor Plants management
MOSCOW. March 22 (Interfax) - Vnesheconombank (VEB), which acquired 100% of the charter capital of Machinery & Industrial Group (M&IG, the Netherlands, parent company of the concern Tractor Plants) last November, has begun accepting applications for managing Tractor Plants.
"In line with the December 7, 2010 decision by the supervisory board, VEB announces the start of the accepting of applications expressing interest in the goals of analyzing the primary proposals for providing management services for the concern Tractor Plants in the context of a program for [its] financial rejuvenation and innovative development in 2010-2016," a VEB statement says.
As reported previously, Russia's Federal Antimonopoly Service (FAS) gave VEB the go-ahead to purchase M&IG last September. Tractor Plants' accounts payable had reached 36 billion rubles by the summer of 2009 (the concern has not released any fresher data).
In 2009-2010, the company attempted to independently handle its debts, but the process was drawn out by a position of principle taken by a number of banks. VEB chief Vladimir Dmitriev announced the possibility of restructuring Tractor Plants' debts last May. Prior to that, the authorities in Chuvashia, where a number of major Tractor Plants assets are located, had announced the company's intent to raise a bank loan of up to 15 billion rubles.
Dmitriev later announced the intent to transfer Tractor Plants companies to VEB's specialized company for managing non-core assets - VEB Capital. Speaking about the quality of these assets, he said that Tractor Plants "needs to be brought into normal operating condition," but VEB "can't even imagine what needs to be done with them." "The concern has an enormous debt burden that has to be restructured, and Tractor Plants assets require modernization," he said.
A number of companies are prepared to take over management duties and even buy Tractor Plants assets. Among these are OJSC Uralvagonzavod, the holding Russian Machines, and the Ist group.
Before the sale, Tractor Plants President Mikhail Bolotin held 80% of M&IG (although a number of business media put the figure at 60%), and its First Vice President Albert Bakov - 20%.
Tractor Plants builds industrial, military, railway, agricultural, construction, and timbering machinery, as well as associated components and parts. The concern has dozens of enterprises in Russia, Austria, Germany, and Denmark.