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ROSNEFT INVESTMENT PLANS IN NAIRIT
Vestnik Kavkaza, Russia
March 3 2014
3 March 2014 - 10:16am
By David Stepanyan, Yerevan. Exclusively for Vestnik Kavkaza
Armenian Prime Minister Tigran Sargsyan said in late February that
Rosneft (Russia) was ready to invest in the construction of a new
factory at Nairi for $500 million. Sargsyan and his Russian counterpart
Dmitry Medvedev and Rosneft President Igor Sechin reached such an
agreement in Sochi. The state company and an unnamed investor agreed to
finance an investment program developed by Jakobs, an international
company, to modernize Nairit. The sides are working on technical
details of the investment projects, place for construction of a new
tire factory, its links with Nairit, necessary legislative procedures
and benefits. In Sargsyan's words, the government of Armenia will
grant the investment program for Nairit status of a free economic zone.
Talks about the merging of Nairit and Rosneft started between Igor
Sechin and the Armenian government in Yerevan in late 2013. As a
result, Rosneft, Pirelli Tyre Russia S.p.A., Oil Techno and the
Armenian Energy Ministry signed a memorandum of understanding and
formation of a joint venture to produce butadiene-styrene rubber.
Rosneft investments and Pirelli projects in advanced rubber production
will help open a modern facility to produce high-tech eco-friendly
tires in Nairit. However, the project faces problems rooting from
the debts and bankruptcy of Nairit.
Nairit has accumulated a debt of $400 million, despite being closed
down since 2010. 90% of the factory's shares were sold to Rhinoville
Property Limited (UK) for $40 million, 10% belong to the government
of Armenia. Rhinoville Property Limited received a loan of $70
million at the CIS Interstate Bank. The bank granted the company
$90 million more in 2009 and $10 million in 2010, making a total
of $170 million. The factory was shut down in 2010 but its owners
have not paid a cent to the bank. The factory generated a debt of
$400 million together with the interest rate and overdue penalties,
becoming bankrupt. It is noteworthy that the owners of the factory
have not only failed to launch the factory after receiving the loan,
they also owe workers salaries for 12 months.
There is little chance that Rosneft would pay the debt of $400
million. The grave situation around the crown jewel of Soviet industry
will only be clarified after the Armenian government gives guarantees.
Rosneft needs to put Nairit on the asset list in order to revive the
chemical giant.
The Dashnaktsutyun fraction at the parliament proposed formation of
a temporary commission to study the causes of the Nairit debts. The
republican majority rejected the idea and believes that it would be a
better idea to tie it with Rosneft talks. Considering the formation
of an independent commission for Nairit would give many answers,
Dashnaktsutyun published a statement about credits and offshore
companies and demanded the parliament majority to give answers.
Millions of dollars from the CIS bank were certainly received under
surveillance of the Armenian government, owner of 10% of shares in
Nairit, and the loans for the closed down factory were affected by
frauds and machinations causing the bankruptcy. The prime minister
has recently tried to deny accusations of Armen and Ashot Sarkisyans
for purposeful bankruptcy of the facility. He said that he had had
nothing to do with machinations in 2006 when he had been President
of the Central Bank. The rebuttal seems rather languid because the
prime minister's skills in financial operations and ability to "cover
things up" are legendary.
http://vestnikkavkaza.net/analysis/economy/52058.html
Vestnik Kavkaza, Russia
March 3 2014
3 March 2014 - 10:16am
By David Stepanyan, Yerevan. Exclusively for Vestnik Kavkaza
Armenian Prime Minister Tigran Sargsyan said in late February that
Rosneft (Russia) was ready to invest in the construction of a new
factory at Nairi for $500 million. Sargsyan and his Russian counterpart
Dmitry Medvedev and Rosneft President Igor Sechin reached such an
agreement in Sochi. The state company and an unnamed investor agreed to
finance an investment program developed by Jakobs, an international
company, to modernize Nairit. The sides are working on technical
details of the investment projects, place for construction of a new
tire factory, its links with Nairit, necessary legislative procedures
and benefits. In Sargsyan's words, the government of Armenia will
grant the investment program for Nairit status of a free economic zone.
Talks about the merging of Nairit and Rosneft started between Igor
Sechin and the Armenian government in Yerevan in late 2013. As a
result, Rosneft, Pirelli Tyre Russia S.p.A., Oil Techno and the
Armenian Energy Ministry signed a memorandum of understanding and
formation of a joint venture to produce butadiene-styrene rubber.
Rosneft investments and Pirelli projects in advanced rubber production
will help open a modern facility to produce high-tech eco-friendly
tires in Nairit. However, the project faces problems rooting from
the debts and bankruptcy of Nairit.
Nairit has accumulated a debt of $400 million, despite being closed
down since 2010. 90% of the factory's shares were sold to Rhinoville
Property Limited (UK) for $40 million, 10% belong to the government
of Armenia. Rhinoville Property Limited received a loan of $70
million at the CIS Interstate Bank. The bank granted the company
$90 million more in 2009 and $10 million in 2010, making a total
of $170 million. The factory was shut down in 2010 but its owners
have not paid a cent to the bank. The factory generated a debt of
$400 million together with the interest rate and overdue penalties,
becoming bankrupt. It is noteworthy that the owners of the factory
have not only failed to launch the factory after receiving the loan,
they also owe workers salaries for 12 months.
There is little chance that Rosneft would pay the debt of $400
million. The grave situation around the crown jewel of Soviet industry
will only be clarified after the Armenian government gives guarantees.
Rosneft needs to put Nairit on the asset list in order to revive the
chemical giant.
The Dashnaktsutyun fraction at the parliament proposed formation of
a temporary commission to study the causes of the Nairit debts. The
republican majority rejected the idea and believes that it would be a
better idea to tie it with Rosneft talks. Considering the formation
of an independent commission for Nairit would give many answers,
Dashnaktsutyun published a statement about credits and offshore
companies and demanded the parliament majority to give answers.
Millions of dollars from the CIS bank were certainly received under
surveillance of the Armenian government, owner of 10% of shares in
Nairit, and the loans for the closed down factory were affected by
frauds and machinations causing the bankruptcy. The prime minister
has recently tried to deny accusations of Armen and Ashot Sarkisyans
for purposeful bankruptcy of the facility. He said that he had had
nothing to do with machinations in 2006 when he had been President
of the Central Bank. The rebuttal seems rather languid because the
prime minister's skills in financial operations and ability to "cover
things up" are legendary.
http://vestnikkavkaza.net/analysis/economy/52058.html