The provinsional administrator of car assembler IzhAvto believes the company’s creditors should introduce an external management team at the bankrupt Russian group. It has also been recommended that IzhAvto not be sold off piecemeal.
Local press reports said the administrator, Rashid Zagidullin, made the comments in a report prepared for creditors ahead of a meeting scheduled towards the end of the month. It said IzhAvto could be solvent again in a year.
IzhAvto suspended output last May and initiated bankruptcy proceedings in August. On 4 September, the republic’s arbitration court appointed a bankruptcy administration to the plant for six months.
According to news agency PrimeTass, the administration report said it was now necessary to resume production at the facility, restructure debts, find a strategic partner and repay debts after reaching a level production that wasn’t loss-making.
In the last quarter of 2009, local reports said KIA Motors Rus was attempting to restart production of Kia cars at IzhAvto. It was reported that Kia and IzhAvto had resolved all outstanding disagreements and would soon sign an agreement to resume car assembly at the plant.
In Russia, external management is applied to a debtor to restore its solvency.