8 Sep 2009 13:12

Kazanorgsintez could decide on debt restructuring in a month

MOSCOW. Sept 8 (Interfax) - Kazanorgsintez could decide on debt restructuring within a month, the Prime Minister of Tartarstan, Rustam Minnikhanov, said at a press conference at Interfax's central office.

"Constructive work is today underway with our creditors. I think that we will decide on debt restructuring in the coming month," he said.

Minnikhanov added that the company currently had a serious debt burden coming to "around 20 billion-30 billion rubles."

He added: "today the enterprise was operating at plus 7%-8% against last year."

He also said that the plastics market had been in decline in both Russia and overseas. However, the market is now showing signs of recovery, Minnikhanov said, adding, "all of this gives hope."

It was earlier reported that TAIF Group (the main shareholder in Kazanorgsintez) had offered the company's creditors a deferment on loan payment coming to eight years, which would include a rate increase to 14%. In addition, changing the terms for supply of raw materials to the enterprises is being considered. According to the FAS, SIBUR and Kazanorgsintez have ruled out give-and-take deliveries of ethane. Both parties are now discussing price formulas for ethane supply.

At a meeting in July chaired by First Deputy Prime Minister Igor Shuvalov, the allocation of 15 billion rubles in state guarantees was reviewed.

Kazanorgsintez is owned by Telecom-Management, a wholly owned subsidiary of the TAIF group. State-owned Svyazinvestneftekhim has 28.4% of shares.

Kazanorgsintez is a leading Russian producer of polyethylene and polyethylene pipe. It produces over 170 chemical products.