Ammonia to repay 111,7bn rubles of debt for 5 years
Articles of the peace of the Mendeleyevsk fertilisers plant with the creditor became known
VEB.RF state corporation and billionaire Roman Trotsenko who became an investor of the long-suffering Ammonia JSC fertilisers plant in Mendeleyevsk finally shook their hands. They signed a peace settlement. Realnoe Vremya learnt the terms of this agreement, which was going to be approved by the Tatarstan Court of Arbitration and then it would stop the case on the enterprise’s bankruptcy. According to the peace settlement, Ammonia will be paying 111,7bn rubles of debt for five years, moreover, the main burden will be in 2025.
Debt deferral until 2025
The solution to the problem of the long-suffering fertilisers plant in Mendeleyevsk Ammonia JSC is on the finishing line. There was signed a peace settlement between the investor of the enterprise and the creditor.
The “historic” meeting of creditors of Ammonia JSC was on 6 July. In fact, the only creditor of the Mendeleyevsk fertilisers plant VEB.RF state corporation was present at the meeting. As Realnoe Vremya found out, Director General Dmitry Makarov signed the settlement on behalf of the plant, and First Vice Chairman of VEB.RF and board member Mikhail Kuzovlev did on behalf of the creditor.
As our newspaper was told in the enterprise itself, this was preceded by approval of the settlement at an unscheduled meeting of creditors of Ammonia JSC on 2 July.
According to the peace settlement, the enterprise will be repaying 111,7bn rubles ($1,5bn) of the debt for five years, until June 2025. Now it will pay not to VEB.RF but Roman Trotsenko’s Azot KJSC that bought its debts. Hence such concessionary terms of its “return”. Moreover, the biggest sum of this amount will be paid during the last year.
The mentioned peace settlement was to be presented to the Tatarstan Court of Arbitration on Friday. In case it is approved, Ammonia’s bankruptcy case will come to an end.
In accordance with supervisory board’s plan under Medvedev
The plan for the salvation of one of the important strategic enterprises of Tatarstan had been created for a long time. It took a year to find an investor. Several players were up for the asset, including LUKOIL. However, Roman Trotsenko’s Azot KJSC won the competition held by Gazprombank for VEB.RF. In August 2019, the supervisory board of VEB.RF under Dmitry Medvedev made a decision to approve of the agreements of assignment of rights in the loan agreement with Ammonia JSC that belong to VEB.RF and sale of 100% of shares of Azot KJSC.
The signing of these agreements became possible only after 29 June this year. However, they will come in force only after the court approves of the peace settlement.
“Ammonia got a reliable strategic partner”
Earlier, VEB.RF told Realnoe Vremya it hoped that the peace settlement within the plant’s bankruptcy proceedings would “allow accelerating the process of restoration of the solvency of the enterprise and further recovery of its activity”.
“Taking into account that earlier Azot KJSC’s structures purchased 100% of shares of Ammonia JSC, it got a reliable strategic partner”, Director General of the Mendeleyevsk fertilisers plant Dmitry Makarov claims.
The head of the enterprise also assumes that this support will not only enable to stop the enterprise’ bankruptcy proceedings but also give it an opportunity to develop, invest and confidently look into the future.
In September 2019, head of Azot Roman Trotsenko claimed in the mass media he was ready to invest 12bn rubles in Ammonia in the next two years.
Ruble devaluation’s hamstringing
The first talks about Ammonia were as early as in Many 2009 when still Prime Minister Vladimir Putin went to Japan and signed a memorandum on intentions to build a new facility in the Novy Mendeleyevsk chemical plant.
In 2010, a contract on the project was signed between Ammonia PJSC and a consortium of MHI, Sojits Corporation and China National Chemical Engineering Co. in the presence of two presidents — Dmitry Medvedev and Rustam Minnikhanov. Six years later, the plant was put into operation, this time together with President Putin and $2,1 billion of investments, which was VEB’s money it borrowed from Japanese banks. It was supposed the investments would pay back by the middle of 2025. The capacity of the first stage of the fertilisers plant totalled 700,000bn tonnes of carbamide, 480,000 tonnes of ammonia and 230,000 tonnes of methanol a year. Revenue in 2016 amounted to 14,2bn rubles, in 2017 — it was 16bn, in 2018 — 18,2bn rubles.
Board Chairman of Ammonia PJSC, Tatarstan State Council deputy Rinat Khanbikov announced his intention to build the second line of the plant. However, due to a sudden rise in the dollar rate in the 2014-2015s, the plant couldn’t pay its loans and accumulated debts. In 2017, Ammonia already paid $170 of the main debt and interest, in 2018 it was to repay about $155m and all $600m in 2019.
The fertilisers plant was profitable only once — in 2016. In 2017, it was in the red — 700m rubles of debt, its loss in 2018 was 20,3bn. By that moment, the enterprise had to return 82,8bn rubles of long-term borrowed money and short-term 34,4bn rubles.