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20.04.2010  
  «Vremya I Dengi», Emilia Khabibullina  
 

Two Years to Respite. “Kazanorgsintez” Management Announced Deadlines to Come Out of Recession.


 
  According to the results of the year 2009 OJSC “Kazanorgsintez” will not pay dividends: the company ended the reporting period with a net loss to the amount of RUB 2.1 billion. However the company plans to receive profit as early as by the end of 2010 and to resume the third stage of the investment program in two years. This was announced yesterday in the general meeting of the shareholders of “Kazanorgsintez”.
Such announcements seemed almost surprising in view of the majority of the statistical data summarizing the results of the company’s year in the report of OJSC “Kazanorgsintez” General Director Leonid Alekhin. Thus, the commodity output was produced to the amount of RUB 22.4 billion (RUB 23.2 billion – in 2008), and almost the same amounts and ratios apply to the products sold. The shareholders’ equity decreased from RUB 9.5 billion to RUB 7.4 billion and the liabilities increased by 6.7% - up to RUB 37.5 billion. Along with that the speaker admitted that as early as in the second quarter “Kazanorgsintez” got some problems in connection with external debt service and its commitments to the partners. However, due to joint efforts, the company finally managed to settle the issue of restructuring of its credit portfolio.
It is to be recalled that the Sberbank of Russia gave a loan to “Kazanorgsintez” in the amount of RUB 20 billion against the RUB 10 billion guarantee of the Russian Government, and the major shareholder of the company - PSC “TAIF” – gave a credit in the amount of RUB 15 billion from its own sources.
In such a situation, no wonder that the investment program scheduled for the year passed was cut from RUB 4 to 1.6 billion and the launch of a part of facilities was carried over to the current year.
In view of the abovementioned, a message of the President of Tatarstan Republic Rustam Minnikhanov who participated in the meeting of shareholders appeared to raise hopes. Thus, summarizing the reports of the speakers, he said that, according to the results of the first quarter, all the parameters – both quantitative and financial – had been surpassed; also he promised to get back to the implementation of the plans of “Kazanorgsintez”. By the way, the results of the first quarter remained unknown event at the press-conference following the shareholders’ meeting. The respondents only mentioned a strict business-plan developed as a logical stage of the debt restructuring. This is the document that imposes absolute indices for volumes, profit and finances for each month, and these are the indices, in comparison with which “Kazanorgsintez” did better in the 1st quarter.
At the same time, the journalists, however, were familiarized with some financial plans for the current year. According to Leonid Alekhin, in 2010, the revenue is expected “in the amount of RUB 30 billion”. “Thirty four,” Director General of PSC “TAIF” Albert Shigabutdinov corrected him right away. “Well, approximately RUB 35 billion,” Alekhin peacefully agreed.
No one dared to touch upon the net profit figures as finally it depends on raw materials resources, energy costs etc. However, according to Leonid Alekhin, “net profit will materialize but it will be entirely used for loan repayment”.
By the way, this year only payment of interest to the amount of about RUB 3.5 billion will be carried out in connection with the loan commitments. This was reported by Albert Shigabutdinov.
It was he who called the last two years “a nightmare”. When assessing the results of the work on debt restructuring he said: “We have got a respite for the next 2-3 years”. After the meeting, at the press-conference, he clarified that he had meant the time required in order to “settle things right again”. Furthermore, CEO of PSC “TAIF” added that, according to the task set by the president of Tatarstan Republic, two years is the maximum term, after which “Kazanorgsintez” must start the implementation of the third stage of its investment program that costs USD 3 billion.
When answering the journalists’ questions if any investors are to be involved for this purpose, Albert Shigabutdinov said it would be done only in case “the investors share the values inherent to the Government of Tatarstan Republic and the company’s shareholders” having explained that the point was the triple increase of production at “Kazanorgsintez”.
"It’s known that the issue of strategic partnership was discussed, this question was raised by Mentimer Shimiev”, Rustam Minnikhanov continued the topic. However he stressed they had received no such proposals. “But in general it is reasonable – it is not conflicting with our strategy”, he spoke in favor of the development of “Kazanorgsintez” as one of the “central and attractive enterprises of the Russian Federation”.
Meanwhile it is too early yet to define precisely what will be included in the third stage – that was the consensus of all the participants of the press-conference. In the same year “Kazanorgsintez” plans to complete construction of the plant Ethylene-500 and put it into operation in October 2010. This will provide the enterprise with additional facilities to produce its own polyethylene and increase the production of polyethylene.
 
 
 

 

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