Sibur invests in a competitor
16 july 2009
SIBUR-Russian Tires (SIBUR-RT) is ready to invest around $50 million in the development of its competitor Amtel-Vredestein's Voronezh production site and start production without waiting for the completion of negotiations with creditor banks on the purchase of debts of JSC "Amtel-Chernozemie" and LLC "Amtel-Chernozemie". However, the necessary condition for investment is the acquisition of control over the assets. JSC "Amtel-Fredestein", the Russian division of Amtel, states that the enterprise is already working, and the SIBUR-RT project should be approved by the creditors.
In the Voronezh Oblast government, it was reported yesterday that a meeting between the top management of SIBUR-Holding and the regional leadership is expected next week, during which the company will outline its plans for Amtel-Vredestein's Voronezh assets to the regional authorities. Igor Karavaev, Deputy Director General of SIBUR-RT, confirmed this information yesterday. According to him, the company has decided to focus on purchasing production facilities in Voronezh, but has not abandoned plans to gain control over other Russian structures of Amtel-Vredestein (the AV-TO trading network and JSC "Amtel-Povolzhie" tire complex). "We want to secure the support of the Voronezh Oblast government and continue negotiations with the creditors of LLC "Amtel-Chernozemie" and JSC "Amtel-Chernozemie" tire complex to purchase their debts," Mr. Karavaev explained. Recall that SIBUR-RT, after the first unsuccessful attempt to agree with the creditor banks, recently again offered to exchange the holding's debts for its non-coupon bonds with a maturity date in December 2012. Their issue of 12.7 billion rubles has been registered by the Federal Financial Markets Service. According to official materials of the Voronezh Oblast Arbitration Court, the total debt of LLC "Amtel-Chernozemie" and JSC "Amtel-Chernozemie" tire complex, which are currently under observation, exceeds 18 billion rubles, with a balance sheet value of around 8 billion rubles. The main creditors are Sberbank, Alfa-Bank, and Petrokommerz.
Igor Karavaev added that SIBUR-RT is ready to start production at the Voronezh site before the completion of consultations with financiers, providing it with raw materials from "Voronежsintezkauchuk", which is part of SIBUR-Holding, and taking away the finished products. "We can already make the enterprise profitable," the top manager emphasized. "And in the event of gaining control, we are ready to invest $50 million in its development."
Meanwhile, Nikolai Khal'ko, Deputy General Director for Corporate Development and Restructuring of JSC "Amtel-Fredestein", reported yesterday that the Voronezh plant is already working at more than 70% capacity, producing around 200,000 tires per month, with an average annual capacity of 2.7 million units. "There is no critical need to restart the enterprise, so the implementation of SIBUR-RT's plans regarding our site must be agreed upon with the main creditors," Mr. Khal'ko believes. "We still have different brands with SIBUR-RT, and we remain competitors in the market. Therefore, the implementation of such a project is possible only if it satisfies all parties involved in the negotiation process," he said.
Former General Director of "Voroněžsintezkauchuk" Alexander Gusev, now the regional Vice-Premier responsible for industry, commented on the SIBUR-RT management's statement cautiously. "It's premature to talk about the company's plans," Mr. Gusev said yesterday. "The regional government is, of course, ready to provide comprehensive support to the investor. However, they will inevitably need to reach agreements with the creditors to implement their plans." The banks themselves do not comment on the situation, and SIBUR-RT previously stated that they had managed to agree with the holders of around 30% of the debt.
In the Voronezh Oblast government, it was reported yesterday that a meeting between the top management of SIBUR-Holding and the regional leadership is expected next week, during which the company will outline its plans for Amtel-Vredestein's Voronezh assets to the regional authorities. Igor Karavaev, Deputy Director General of SIBUR-RT, confirmed this information yesterday. According to him, the company has decided to focus on purchasing production facilities in Voronezh, but has not abandoned plans to gain control over other Russian structures of Amtel-Vredestein (the AV-TO trading network and JSC "Amtel-Povolzhie" tire complex). "We want to secure the support of the Voronezh Oblast government and continue negotiations with the creditors of LLC "Amtel-Chernozemie" and JSC "Amtel-Chernozemie" tire complex to purchase their debts," Mr. Karavaev explained. Recall that SIBUR-RT, after the first unsuccessful attempt to agree with the creditor banks, recently again offered to exchange the holding's debts for its non-coupon bonds with a maturity date in December 2012. Their issue of 12.7 billion rubles has been registered by the Federal Financial Markets Service. According to official materials of the Voronezh Oblast Arbitration Court, the total debt of LLC "Amtel-Chernozemie" and JSC "Amtel-Chernozemie" tire complex, which are currently under observation, exceeds 18 billion rubles, with a balance sheet value of around 8 billion rubles. The main creditors are Sberbank, Alfa-Bank, and Petrokommerz.
Igor Karavaev added that SIBUR-RT is ready to start production at the Voronezh site before the completion of consultations with financiers, providing it with raw materials from "Voronежsintezkauchuk", which is part of SIBUR-Holding, and taking away the finished products. "We can already make the enterprise profitable," the top manager emphasized. "And in the event of gaining control, we are ready to invest $50 million in its development."
Meanwhile, Nikolai Khal'ko, Deputy General Director for Corporate Development and Restructuring of JSC "Amtel-Fredestein", reported yesterday that the Voronezh plant is already working at more than 70% capacity, producing around 200,000 tires per month, with an average annual capacity of 2.7 million units. "There is no critical need to restart the enterprise, so the implementation of SIBUR-RT's plans regarding our site must be agreed upon with the main creditors," Mr. Khal'ko believes. "We still have different brands with SIBUR-RT, and we remain competitors in the market. Therefore, the implementation of such a project is possible only if it satisfies all parties involved in the negotiation process," he said.
Former General Director of "Voroněžsintezkauchuk" Alexander Gusev, now the regional Vice-Premier responsible for industry, commented on the SIBUR-RT management's statement cautiously. "It's premature to talk about the company's plans," Mr. Gusev said yesterday. "The regional government is, of course, ready to provide comprehensive support to the investor. However, they will inevitably need to reach agreements with the creditors to implement their plans." The banks themselves do not comment on the situation, and SIBUR-RT previously stated that they had managed to agree with the holders of around 30% of the debt.