Russian automaker GAZ Group’s attempt to restructure its debts has again been stalled by Alfa Bank, according to business daily Vedomosti, which cited sources involved in the talks.
The Group has been trying to restructure RUB40bn (US$1.3bn) of debts for a year and the government decided six months ago to provide the group with RUB20bn of guarantees for the restructuring deal. Alfa Bank was the last creditor to agree debt restructuring terms, finally signed an agreement in October.
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However, the finance ministry failed to execute the government guarantees on time, and GAZ Group had to sign an additional agreement with its creditors to prolong the debt restructuring deal until next month, according to Vedomosti sources, who added that Alfa Bank had refused to sign the agreement.
This means GAZ Group again does not have a debt restructuring agreement and cannot receive government guarantees.
Alfa Bank claims that when it was preparing to sign the agreement in October, Russian Machines, GAZ Group’s major shareholder, was taking on the carmaker’s liabilities to the bank worth a total of RUB4bn, sources told Vedomosti.
Russian Machines was expected to receive a new loan from VTB Bank to restructure the debt. GAZ Group, Russian Machines, VTB Bank, and Alfa Bank were expected to sign the relevant agreement and an additional agreement on debt restructuring last Thursday, but Alfa Bank refused to do so.
It is now unclear when restructuring talks could be resumed, said the daily.
The group’s vice president Sergei Zanozin said the sides were expected to settle the debt restructuring issue in the near future.
