GAZ group may go bankrupt, if not urgently will receive 30 billion rubles

18 April 2019

Oleg Deripaska asks the state's 30-billion compensation for American sanctions against his company

The website "Kommersant" reported that "GAZ Group", owned by oligarch Oleg Deripaska, maybe in the second half of this year, dropping production by 40% and suffer default for corporate payments, which according to the manual group will cause serious socio-economic consequences.
Such conclusion contains in the letter of the General Director of "GAZ Group" Vadim Sorokin, sent on March 29, Deputy Prime Minister Dmitry Kozak, in which he requests to pay to save the company ₽29.5 billion Without this state support, ranked (from 6 April, but the Americans delayed until June 6) American sanctions SDN-list Russian automaker may default on its financial obligations, because he has to increase its loan portfolio in increasing volumes and at less and less favorable terms. So, the loss in 2018 amounted to ₽11.3 billion, as Gas had to build up its working capital with the profits and all its own funds.
The concerns of the company because of the sanctions and the further growth of the load on the working capital, it can lose up to 40% of production volumes in the second half of this year, with the risk of corporate default with all its consequences for the employees of the company. From the budget will have to allocate for the completion of subsidized loans from ₽2.14 billion in 2019 to ₽of 4.64 billion in 2021-m

In addition, in the second half of the group to prevent idle their factories because of the projected reduction in production by 40%, considers it necessary to limit the range of produced models and modifications, restricted to the most localized. Today, according to "GAZ Group" the level of localization of its vehicles ranges from 50% to 70% depending on the model. To prevent this GAS requires that the government purchased from him in 2019 ambulances, school buses and special vehicles for law enforcement agencies, and, unopposed, in the amount of not less than ₽20 billion that compensates for his loss of revenue on ₽16 billion and will allow you to invest ₽2.9 billion in localization of components.
However, Oleg Deripaska already "hit the bell", and even invited to Nizhny Novgorod on AZ GAS group of foreign journalists who had been told that the native state does not have the proper attention to the needs of the company is experiencing difficulties, and after the application of sanctions, in General, will become bankrupt and will inevitably be subject to nationalization, which would reduce the already shrinking in the eyes of the private sector of the Russian economy.
The Ministry said "Kommersant" that the request of Gas "carefully considered" view of the social importance of the enterprise, because it employs 40,000 people, but the intention to nationalize the company the state does not.
Assistance from the "strategic investor", it is expected the group in the face of the Volkswagen group (in particular its new cargo group Traton AG, including the brands MAN, Scania and VW Trucks) within Speke, and not followed – according to experts, the Germans are waiting for the lifting of sanctions with this property Deripaska. Especially because the precedent is already there, because he owned RUSAL and En+ the sanctions lifted.
Within SPIK should be trucks with GVW 38-44 tonnes and LCV with GVW 3-5 T. According to experts, under LCV perfect new light commercial vehicle VW Crafter II.
In 2018, the GAS got quite large contracts for the supply of ambulances, school buses and emergency vehicles, and, according to observers is not due to preferences of the state, and in a fair clash with rival "Group SOLLERS" and Ford Motor. The first of them (in fact, UAZ) offers, though, and cheap enough, but too archaic model, and the second is too expensive.
Big profits on the special model for law enforcement agencies Gaza also cannot be obtained because the purchase of the cars themselves is costed at the actual cost, but a significant portion of value added accounted for the customization made by foreign enterprises.
The development of the series NEXT (as truck series "Lawn" and "Ural") in the framework of Speke, by the way, is separate and, in principle, can be made without the participation of a foreign partner.

PS Well, sanctions actually imposed, and the leading capitalists of the country are already demanding from the state (read taxpayers) compensation for what has not yet come. In fact here most likely takes place off-market "push up" competitor in the face of "SOLLERS", which after the decision of Ford Motor about the withdrawal of the Russian market and transfer of ownership of the plant in Yelabuga, where a popular family Ford LCV Transit has significantly strengthened its market position.
From the market point of view, it is clear that modern and high quality Ford Transit still ahead in consumer likes, even the latest one "GAZelle NEXT". But it is a legitimate interest of consumers is to get their money the best in terms of price and quality of the product in the face of "social" impacts that are "straining" the government clearly takes a back seat.
Interestingly, the answer to the demarche of "GAZ Group" his main rival "Group SOLLERS", Vadim Shvetsov owned by?.