KamAZ Got Long Break on Debt Payment
// Tataria became the company guarantor for Ministry of Finance
Power and Business
As Kommersant found out, in the end of last week Ministry of Finance issued an order which contains a directive for Vnesheconombank (VEB) to make a peaceful settlement on KamAZ debt of $151 million. The track producing plant will have a record long time to cover the debt – 30 years. The guarantor of debt coverage will become Tataria. This is one of the consecutive government steps to consolidate state control over giant plant.
Yesterday, the information about the peaceful settlement was confirmed to Kommersant by Dmitry Pankin, Director of Department of International Financial Relations, State Debt and Sate Financial Assets at Ministry of Finance. “In this ministerial order there is a directive to VEB to sign a peaceful settlement with KamAZ. Next step would be to approve this agreement in court,” he told Kommersant. The approval of peaceful settlement is scheduled in Arbitrage Court of Tataria on December 23.
According to Kommersant information, the project of the agreement gives KamAZ up to 30 years (till 2031) to cover the debt. Instead of the Ministry of Finance, the new guarantor of the debt becomes Tataria.
Let’s remind that in 1997 EximBank of Japan open $150 million credit line for KamAZ to purchase equipment Kanematsu Corp. and Mitsubishi Heavy Industries for production of diesel engines, which would comply with ecologic standards Euro-2 and Euro-3. After the crisis of 1998 the financing was suspended and the debt for Kanematsu Corp. was restructured till 2011. However, KamAZ did not follow a schedule of debt payments.
In November parliamentarians of Tataria approved amendments for the republic’s budget, which gives guarantee for KamAZ debt coverage. It was suggested to use as collateral the most liquid assets of the track plant.
Elena Kiseleva, Ekaterina Safronova; Luisa Ignatieva, Kazan
All the Article in Russian as of Dec. 20, 2005
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